Tax-increment financing (TIF) is a development tool established under state law for local governments to promote economic growth within underperforming areas of a community. The properties within these designated areas in are established as TIF Districts by the local government following a public hearing process. Once established, each tax parcel’s equalized assessed valuation – or EAV – is tracked as a frozen baseline.
Over the course of the next 23 years, taxes on the parcels continue to be assessed like any other parcel in the community subject to property tax. However, property taxes are segregated with the amount paid and the dollars attributed to the frozen baseline distributed proportionately to all taxing bodies, such as county, city, township, schools, parks and libraries.
Any taxes paid and attributed to increases in EAV that occur after the TIF was established are paid into a Village government fund unique to the TIF district. Village government may only spend these fund dollars within the original TIF district during its 23-year duration. In addition to these geographical restrictions, TIF dollars also may be spent on limited activities such as Village infrastructure, land purchases, environmental remediation and urban revitalization projects.
The Village of Oak Park currently has two active TIF districts - Madison Street Business Corridor and Downtown Oak Park (Greater Mall Area). A third TIF - Harlem-Garfield Avenue - was terminated effected Dec. 31, 2017.