Lake Zurich taxing zone extension plan gains necessary General Assembly support
Lake Zurich has gained General Assembly approval to extend the life of a special taxing zone meant to spur downtown redevelopment.
Since 2002, Lake Zurich has had a tax increment financing district in place in an attempt to revitalize downtown. The special taxing zone is supposed to expire in 2025, but the village wanted state legislature approval to extend it 12 more years so Lake Zurich does not have to contend with balloon payments on debt.
After receiving Illinois House approval this week, Lake Zurich cleared another hurdle Thursday when the state senate voted 50-0 in favor of allowing the TIF extension. The governor must sign off on the plan.
Lake Zurich Mayor Thomas Poynton called the General Assembly approval for the taxing zone extension "a major victory for all of Lake Zurich."
"With this success, we will now have the flexibility to refinance TIF-related debt at lower interest rates and enhance the overall financial position of the village as a whole," Poynton said.
In a TIF district, property tax revenue is frozen at a certain amount and any additional revenue goes into public improvements rather than to local governments. Officials at schools and other taxing agencies often voice concern when a village wants a TIF district because of a resulting revenue loss.
Lake Zurich has about $28 million in outstanding debt associated with the long-stalled downtown redevelopment. Roughly $16 million of that debt is attributed to property purchases.
Village officials say annual repayments for downtown are scheduled to balloon in the new budget starting May 1. They say if the TIF district isn't extended 12 years to even out debt repayment over a longer time, the village would be forced to cover its loans from the general fund.
Before the TIF extension proposal could go to state lawmakers, Lake Zurich needed formal support from other governments serving the village. The backing was secured from Lake Zurich Unit District 95, Ela Area Public Library District, Lake County, Ela Township, College of Lake County and the Lake County Forest Preserve District.
Village officials credited Republican state Sen. Pamela Althoff of McHenry and Republican state Rep. Ed Sullivan Jr. of Mundelein for helping to push the TIF measure through the General Assembly.