SENATE PASSES COMPTROLLER MENDOZA'S TIF ACCOUNTABILITY ACT
Friday, May 28, 2021
SPRINGFIELD – The State Senate Friday unanimously passed Comptroller Susana Mendoza’s TIF Accountability Act, which 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. The measure now goes to Governor Pritzker for his signature.
“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.
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.
“Most residents don’t know how TIF districts affect their property taxes or benefit the community,” Gillespie said. “This plan will shed light on the process and provide transparency in our local governments.”
“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.