COMPTROLLER MENDOZA'S TIF ACCOUNTABILITY ACT SIGNED INTO LAW
Friday, July 23, 2021
SPRINGFIELD – A government transparency measure championed by Illinois State Comptroller Susana Mendoza was signed into law today.
The TIF Accountability Act will let taxpayers know more about how the Tax Increment Financing districts (“TIFs”) are performing. The House passed the bill 114-1 on April 21, and the Senate passed it 56-0 on May 28. Gov. JB Pritzker signed the measure into law today.
“This is a sensible plan to ensure taxpayers are presented with a more complete picture of whether promises made are promises kept when it comes to TIF districts in their communities,” Mendoza said. “I appreciate the efforts of lawmakers and the governor to ensure more public transparency surrounding TIF districts.”
Municipalities with TIF districts already are required by law to report certain information to the Comptroller’s office annually. However, the information includes little data that demonstrates the effectiveness of the TIF districts, leading to a disconnect between the goals outlined for the TIF at its creation and its actual progress toward meeting those goals.
House Bill 571, sponsored by State Rep. Jonathan Carroll (D-Northbrook) and State Sen. Ann Gillespie (D-Arlington Heights), requires additional oversight of TIF districts by requiring municipalities to report the following additional information:
- A comparison between the original projected increment and jobs for the TIF versus the actual amount of jobs and increment created thus far.
- An update on the stated rate of return for the TIF development, verified by a third party.
- Actual debt service against any notes issued by the municipality.
The measure will require municipalities, not the developers, to choose any consultant for providing analysis of the projected increment and the value of any debt issued by the municipality.
Also, the TIF District Redevelopment Plan would have to be included in the report submission when the TIF district is created, extended or, as is current law, when the redevelopment plan is amended.
“Taxpayers deserve to know exactly how TIF developments could affect their property taxes,” Gillespie said. “Our plan will keep developers and local governments honest, and create a transparent process that shows residents whether goals are being met.”
“Creating more transparency around TIFs is essential and very necessary,” Carroll said. “This will give the people of Illinois the opportunity to better know and understand how their valuable tax dollars are being spent.”
“The Illinois Federation of Teachers applauds Comptroller Mendoza’s continued commitment to transparency and accountability through the passage of HB 571, the TIF Accountability Act,” said IFT President Dan Montgomery. “It is important for school leaders, including union leaders, to understand how a TIF will impact local school funding. This legislation will provide the necessary information to truly assess a TIF’s financial impact on the community and ensure that the TIF process isn’t being abused.”
The provisions in the measure only would apply to TIF districts beginning in or after fiscal year 2022.
TIF districts are an economic development tool used to generate investment and economic growth, improve infrastructure, and increase property values in blighted areas of a community.
Currently, there are more than 1,200 active TIF districts in Illinois.