VILLAGE OF SOUTH JACKSONVILLE TIF DISTRICT
What is Tax Increment Financing?
The search for innovative local financing for economic development is a constant challenge for most cities, town and villages throughout the country. For many communities, particularly those in rural areas, Tax Increment Financing (TIF) is often the only locally controlled mechanism available for stimulating new investment, economic growth and a better quality of life.
In 1977, the Illinois Legislature passed the "Tax Increment Allocation Redevelopment Act", now recorded as 65 ILCS 5/11-74.4 et seq. The TIF Act recognizes that in many municipalities of the State blighted and conservation areas exist which need to be developed to eliminate those conditions or prevent them from occurring.
TIF is used to reallocate increased property tax revenues created by increased assessed valuation that is realized after a TIF District is established.
A TIF District may last up to 23 years unless the municipality chooses a shorter period.
TIF does not raise property taxes and it does not create a new tax or taxing district.
TIF in Illinois establishes a geographic boundary within which new private investment is encouraged. Using TIF, municipalities can preserve a property tax base during the life of the TIF District that pays for basic public services the TIF redevelopment area already receives. New incremental property tax revenue helps pay for the infrastructure necessary for stimulating additional private-sector investment.
What are the potential benefits for the community?
Tax Increment Financing provides authority to the Village of South Jacksonville to attract development by rebating property tax money to builders for making infrastructure improvements, while making the private sector shoulder the risk.
As a result, the Village anticipates the TIF District will stimulate resurgence of population, employment and assessed valuation throughout the entire community.
What can private developers gain from South Jacksonville TIF?
TIF is available for business and industry to fund new developments. Through redevelopment agreements, increased real estate (i.e. the "increment") resulting from new private investment can be shared with developers to defray a variety of eligible project costs such as:
- Land acquisition, site preparation and demolition
- Feasibility and engineering studies
- Renovation and/or rehabilitation of existing buildings
- Marketing, legal and accounting services
- Job training costs
- Construction interest and/or portions of long-term financing costs
New incremental property tax revenues are deposited into a special Village TIF Fund to pay developers for eligible expenses. Although the Village contributes its share of TIF Increment to the special TIF account just like other taxing jurisdiction, schools are not impacted to the full extent of their tax rates due to special statutory provisions.
To accelerate new private investment the Village may issue bonds to finance specific public sector improvements that will presumably enable the redevelopment of deteriorated, blighted, or other key conservation areas with the TIF District. Tax increment can then be used to repay the bonds. The village may also choose to use TIF on a pay-as-you-go basis whereby incremental property tax revenue is spent as it is collected. In either case, all incremental funds generated by the TIF must be used for projects within the TIF District until all associated public debts are repaid and the TIF ends.
For more information or to apply for funding, contact the South Jacksonville Tax Increment Financing, contact Gordon Jumper, Village Present at 217-245-4803.
