Daily Herald opinion: Gillespie proposal draws important attention to complex, misused tax mechanisms

This editorial represents the consensus opinion of the Daily Herald Editorial Board

State Sen. Ann Gillespie doesn't expect either of two companion taxpayer-focused bills she introduced last week to pass in their present form, and we're not prepared to say whether they should or shouldn't.

What we do know is that Gillespie has used the proposed development of a Bears stadium on the shuttered Arlington Park property to start a more important conversation with a reach beyond the strict limits of this one project.

Finding all the financing for the $5 billion Bears proposal is going to require time, vision and delicate negotiations. But, as Gillespie's legislative ante demonstrates, the solution will have ramifications extending to all kinds of developments throughout the suburbs and ranging far into the future.

"I'm not looking at this bill as a Bears bill, but rather as an economic development tool that is in the same general categories as a TIF," the Arlington Heights Democrat told our Christopher Placek. "And that's why I thought it would be good to discuss them as a group."

The group involves two acronyms that can make taxpayers' heads spin and frustrate school, library and park officials. One is PILOT - for Payments in Lieu of Taxes. The other, slightly more familiar but equally complex, is TIF - for Tax Increment Finance district.

Both tools involve freezing tax assessments in ways that end up diverting money away from schools and other entities to attract developers. Neither is bad in and of itself, but both are open to abuse and misuse, and, as Gillespie has long argued involving TIFs, they need close scrutiny and better control.

TIFs were originally intended to help communities attract the interest of developers to blighted or troubled sites they might not otherwise find appealing. A PILOT provides a tax freeze to help a community attract a major development, though with some capacity to mitigate the losses to schools and government units.

TIFs in particular have become a too-welcome mechanism for luring development, often resulting in breaking-point stretches of the term "blighted" to justify their use while simultaneously producing more users of the parks, libraries and schools that lose money in the deal.

So, even the strongest supporter of the proposed Bears move can understand why school districts 15, 211 and 214, all of which would be affected by a TIF or PILOT, are considering options for hiring lobbyists to guard their interests in Springfield. Beyond their parochial concerns, though, the Bears proposal offers an opportunity for the state to apply renewed scrutiny that could help taxpayers in communities throughout the suburbs and the state.

As we've acknowledged, no Bears project is likely to happen without some taxpayer assistance. What form that should take clearly still needs consideration and debate, but there is little question that if a TIF or PILOT is to be involved, this is an opportunity to modify those mechanisms to ensure they are managed appropriately and consistently for taxpayers, while protecting the interests of schools and other bodies that depend on tax income. Gillespie is wise to recognize that. The rest of the General Assembly should take up her challenge.