TIF districts: why your rate can rise while values grow
Tax increment financing freezes the base for other taxing bodies and captures the growth.
Tax increment financing is one of the least understood things on an Illinois tax bill, and one of the more consequential. It can mean your rate rises even while property values in your area grow.
How a TIF works
A municipality designates an area as a TIF district. The equalised assessed value in that area at that moment becomes the base.
From then on, for the life of the district — commonly 23 years — the taxing bodies that overlap it (schools, park district, library, county) continue to receive tax on the base value only. Any growth above the base, the increment, goes to a TIF fund controlled by the municipality and spent within the district.
The consequence for everyone else
This is the part that is rarely explained.
A school district sets a levy — a total number of dollars. The rate is that levy divided by the total taxable value in the district. But the increment inside a TIF is not available to the school district's base, so the levy is spread across a smaller pool.
New development appears, values rise, and yet the rate does not fall the way it otherwise would. That is the mechanism.
Whether that is good or bad
Genuinely contested, and this article will not settle it. The case for TIFs is that the development producing the increment would not have happened otherwise, so nobody has lost anything and the area gains infrastructure. The case against is that development often would have happened anyway, in which case growth that should have relieved everyone's rate is captured by one district.
What is not in dispute is the arithmetic: increment inside a TIF does not enter the base other districts levy against.
What you can and cannot do about it
You cannot appeal it. A TIF is a municipal policy decision. The Board of Review has no authority over it, and an appeal arguing about a TIF will be dismissed by an office that cannot act on it.
You can still appeal your assessment. Being inside or outside a TIF does not change whether your assessed value is correct and even-handed, which is the only question the appeal system answers.
You can attend the municipal meetings. TIF creation, extension and expenditure are decided in public by elected bodies, and extensions in particular are decided with very little attention.
Finding out
Your tax bill may indicate a TIF district. Municipalities publish TIF maps and annual reports, and Illinois requires reporting on TIF finances. If your rate has risen while your area has visibly improved, this is one of the first things to look at.