Tax Increment Financing (TIF)
The City of Des Plaines currently has five (5) Tax Increment Financing (TIF) districts that aim to revitalize and invest in specific areas that have high potential for new development economic growth.
Tax Increment Financing (TIF) is an incentive method used by local governments to better the economic condition of that designated area (or district). TIF funding freezes the assessed valuation of that area for a period of time. The development that subsequently occurs in there results in an increase in the valuation of the district. The incremental property tax increase is placed into a segregated fund of the City and is used to make public improvements, like new roads or new sewers, and provide incentives to attract businesses or help existing businesses expand without tapping into general funds or raising taxes.
Click to view map.
The City's TIF Districts are:
- TIF #3 Wille Road
- TIF #5 Perry/Lee
- TIF #6 Mannheim/Higgins
- TIF #7 Mannheim/Higgins South
- TIF #8 Oakton Street Corridor
What do TIFs do?
TIFs help local governments attract private development and new businesses. New businesses mean more jobs, more customers, and, in turn, more private investment. TIF designation also helps retain existing businesses that might otherwise find more attractive options elsewhere. The jobs and additional investment - private and public - mean more money for the community. TIF also helps to overcome the extraordinary costs that often prevent the development and private investment from occurring on environmentally contaminated and other properties. As a result, the TIF area itself improves and property values go up.
What are the benefits of TIFs?
Without TIF benefits, a deteriorating and decaying area may not improve. Businesses tend to not want to sink capital into decaying areas and most local governments cannot afford the costly improvements needed without raising taxes for the residents. However, in a TIF district money that is used for the potential improvements are generated by businesses - new and old - attracted by the incentive of TIF benefits. The money for the benefits come from the growth in property tax revenues, otherwise known as the tax increment. The benefits could include infrastructure improvements and other incentives.
What is a "Tax Increment?"
A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after TIF designation. The establishment of a TIF does not reduce property tax revenues available to the overlapping taxing bodies. Taxing bodies are the entities that these property tax revenues are distributed to including school districts, park districts, counties, community colleges, etc. The property taxes collected on properties included in the TIF at the time of its designation continue to be distributed to the taxing districts in the same manner as if the TIF did not exist. Only property taxes generated by the incremental increase in the value of these properties after that time are available for use by the TIF.
TIF District Joint Review Board
The City of Des Plaines annually convenes a Joint Review Board (JRB) for every one of the City’s four Tax Increment Finance (TIF) districts. Illinois State Statute requires every TIF district submit an annual report to the State of Illinois and conduct a Joint Review Board annual meeting to review the report. Each JRB is comprised of all the taxing bodies pertaining to every property within that TIF (Cook County, school districts, park districts, etc.).
Tax Increment Financing District Joint Review