The first phase in an innovative agreement
reached last year between the Village and local school districts
to carve out completed projects from the Downtown Tax
Increment Finance (TIF) District was launched in January with
the release of seven properties that will add nearly $21
million of value to the property tax base.
School districts 97 and 200, as well as
all other recipients of property taxes levied on Oak Park real
estate, should see the new money in disbursements from the Cook
County Treasurer that typically are issued in the fall. Because
the tax revenue released from the TIF is viewed as new
development, taxing bodies will receive the full benefit of the
added property value in the first year, without state tax cap
restrictions. School District 97 should receive approximately
$700,000 in new money, while School District 200 should receive
about $560,000.
Oak Park's Downtown TIF, one of
three in the community, is set to expire in 2006. The Village
has the legal authority to extend the TIF through 2018, but
pursued a cooperative agreement with the school districts that
would maximize benefits to those taxing bodies most affected by
an extension. Under this carve-out approach, it is anticipated
that more tax revenue will be generated for the schools with a
TIF extension than if the TIF were allowed to expire in 2006.
The intergovernmental agreement between
the Village and school districts has earned accolades from
other communities as an innovative response to the
schools' need for more money and the community's
need to continue nurturing development downtown. By carving out
completed projects from a TIF, all taxing bodies benefit from
the availability of the resulting growth in the tax base as
allowed under state tax cap law, while the municipal government
continues to have a vital economic development tool that, for
Oak Park, has proven essential to the redevelopment of the
downtown area.
Under the agreement, another $26.7 million
in property value from anticipated new development will be
released by 2006, with additional value of $44.6 million
released between 2007 and 2018 after the TIF is extended.
As with the first carve out, all taxing
bodies will then be able to tax the full equalized assessed
value of each development in the year it is removed from the
TIF without being restricted by state-imposed tax caps. Even
with major developments removed from the TIF, remaining
property would continue to generate funds to help spur further
redevelopment in the downtown area.
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How TIFs Work
Tax
Increment Finance (TIF) districts work by freezing
property values within their boundaries. The tax
revenue from any incremental growth above the
frozen level is then reinvested within the TIF
according to strict state guidelines, typically for
infrastructure improvements, to spur still further
growth. Oak Park has used TIF funds to buy smaller
property parcels to create larger, more developable
sites and to make sites more marketable such as by
removing environmental hazards remaining from past
land uses.
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