Batavia: No to tax law changes
Batavia is telling state lawmakers to leave its tax-increment financing abilities alone.
The city council Monday passed a resolution urging legislators to reject bills in the current assembly that would change the fundamentals of the financing tool governments use to encourage redevelopment in blighted or otherwise undesirable areas.
In a TIF district, property tax payments to taxing bodies are frozen at the start. If improvements increase the value of the property and property taxes increase, that money is used to pay for the improvements instead of being distributed to taxing bodies, such as school and park districts. TIF districts expire after 23 years.
Batavia has three TIF districts covering the downtown and some of the near-east side, enacted in 1989, 1994 and 2004.
This year, the city plans to spend $1.7 million in TIF money, much of it for a proposed streetscape project to improve the look of the downtown.
“There are several bills which would significantly change the TIF statute and really have a huge impact on our TIF districts,” City Administrator Bill McGrath told the council.
Monday’s resolution, he said, would serve “as an indicator to legislators downstate that this would be very poor for us.”
Under a bill proposed by state Rep. Elizabeth Hernandez, a Cicero Democrat, other taxing districts would get the authority to opt out of a proposed TIF district.
Her bill also proposes prohibiting TIFs from being formed if the equalized assessed value of the property in the proposed TIF plus the EAV of property in other TIFs in the town is equal value to 10 percent or more of the EAV of the whole town. And an amendment would require that TIFs only be allowed if “redevelopment is unlikely to happen in the absence” of TIF funding.
Another bill, proposed by Democrat Rita Mayfield of Waukegan, would mandate full tax payments to school districts affected by tax-increment financing resume three years after the TIF is formed.
Both bills have been referred to the Rules Committee, of which Republican Rep. Tim Schmitz of Batavia is a member.
Schmitz’ father, Alderman Tom Schmitz, is chairman of Batavia’s government services committee, which recommended the resolution. But it was McGrath who suggested the move to the committee.
Batavia has used TIF funds for many projects in its downtown, including purchasing the First Baptist Church and the Thomle building; purchasing and demolishing two buildings on South River Street; dredging Depot Pond; paying for a pedestrian bridge over the Fox River; helping to pay for expanding the Peg Bond Center; buying sculptures for the Donovan Bridge; hiring consultants, including one working presently on a proposed streetscape improvement plan; giving grants for facade and other building improvements to private property owners and lending money to others, such as Water Street Studios.