How TIF Districts can impact local schools
October 29th, 2006
TIF districts can have a negative impact on local schools.
- NEW 2/26/2007: “It’s hard to get voters worked up about something with a name so dull it makes their eyes glaze over: Tax Increment Financing or TIFs.” Read the full Sun-Times article here.
- Read about OP school district 97 lawsuit.
Lawsuit filed in May 1984
Lawsuit Amended –
Lawsuit Settled out of court – March 1985 - “Over the lifetime of the LaSalle Street TIF, Chicago schools would lose at least $1 billion.” See the full Chicago Tribune Editorial dated August 7, 2006
- Read about how the TIF system in Chicago diverts millions of dollars in property taxes from education to development in the Chicago Reader article dated June 23, 2006.
- “Two generations of school kids could be affected negatively by a TIF,” Weber said. See the full Chicago Tribune article dated October 25, 2006.
- “If however, the EAV is rising naturally, or the property would have been improved without a TIF, then the taxing bodies within the area are losing the EAV that would have otherwise been theirs.” See the full Quick Guide to TIFS.
- Read about the Special Tri-Board Meeting of: Village of Oak Park, OPRFHS Board of Ed. District 200, and OP Board of Ed. District 97 on January 5, 2005 right here.
- The School District [Pleasantdale School District # 107] claimed that if the TIF ordinances were implemented and the attendant redevelopment plan and project allowed to proceed, the School District and other overlying taxing districts would be irreparably harmed by the illegal and improper diversion of tax revenues from their taxing districts.” You can read the full document here.
- “Local villages have adapted TIFs as a source for economic growth and development but the increased use of these has continued to put a strain on local school districts.” See the full Desplaines Valley News article dated December 7, 2006.
- From the Illinois Association of School Boards, “TIF costs to schools are rising as abuses of the TIF law become increasingly costly and common. In LaSalle County, a $600 real estate tax bill last year included $399 to be diverted to the local TIF. ” Read the full article here.
Does anyone know of a school district that benefitted from a TIF. The City of Chicago seems to have many TIF districts. They must have an amazing school district.
No, but I know the Oak Park schools have lost out big time, as in 10s of millions.  Is this what the “tuition reimbursements” are meant to avoid?
I am certain that research would find plenty of TIF Districts that benefited the school districts in which they were located. I am equally certain that the same research would find TIF Districts that did not benefit their school districts and some that hurt the school districts.
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I see no reason for us to take any chances as to which category our school district would fall into with a Riverside TIF. Lets ask the Village Board to take the first dollars in the TIF pool and give them back to the school district in an amount equal to what they would have gotten without TIF. This takes the school district out of the equation. If we could get this commitment, we can move on to talking about other aspects of the TIF and a downtown plan.
Does anyone know of a school district that benefitted from a TIF. The City of Chicago seems to have many TIF districts. They must have an amazing school district.
Pleasantdale School District 107 v. Village of Burr Ridge
341 Ill. App. 3d 1004, 793 N.E. 2d 856 (2003 1st Dist.)
Found failure of “but for” and found and included extensive discussion of the fact that developing was already occurring in a proposed TIF district that had not requested nor required TIF funds. That is our situation here. (Their consultant was: Camiros.)
Henry County v. Village of Orion
278 Ill. App. 3d 1058, 663 N.E. 2d 1076 (1996 3d Dist.)
Found failure of “but for” and found new building already occurring within a proposed TIF area. That is also our situation here.
Castel Property v. City of Marion
259 Ill. App. 3d 432, 631 N.E. 2d 459 (1994 5th Dist.)
Found failure of but for because growth and development was occurring in the direction of the redevelopment area, in proximity to the redevelopment area before adoption of a final TIF. This, again, is our situation here.
In conversations with Sharon Patchak-Layman who is a long-time member of the Oak Park School board I have come to realize what a disaster this proposed TIF can be for our children. In 1985 Oak Park started the first of several TIF zones and are continuing to this very day. Ms Layman has indicated that over the course of their TIFs this has meant the loss of millions of dollars to the local schools and their children. She and others in Oak Park have been fighting this monster ever since.
Our Village Board can perpetuate the length of the Tif for up to 23 years, with possible extensions, and roll-overs, that can rob our children of the benefits of increased revenue streams from our CBD for over two generations. The current Village Board will be long gone by this time. I think that it is important to keep this in perspective. Imagine having your income frozen for a period of 23 years while inflation continues to eat away at those needs and projects that you want to complete, as well as those family needs that so often arise. Our school boards will be faced with the same dilema and will have to go “hat-in-hand” to the Village, and to the electorate, to ask for more funding to keep pace. This is not an enviable position and one that we should not put our school board in.
No matter what happens a TIF will be bad for our schools and no amount of rebates or refunding schemes can compensate for this lost revenue unless the entire amount is refunded and then there is no need for the TIF.
Progress is already underway without a TIF as is evidenced by the large crane in the middle of our Village. We certainly don’t need to spur development by giving away tax dollars that are due our children by giving them to developers.
Jim Reynolds
I am not a lawyer and so cannot give legal advice, but as I read as a citizen this Pleasantdale decision – it seems to me as if the “but for” test requires that “but for” the TIF no development would occur, and that “no development” is disproved by the presence of development within and near the TIF district. We already have development in and near the TIF area. The “but for” test also requires that the lack of development must be DUE TO the “blighting factors”. The fact that people do not know about Riverside, that the rents are too high, that the buildings are poorly maintained, that people prefer to shop in malls, etc., does not qualify us for a TIF. Further, the fact that you are not attracting the development you want, i.e. retail and not just condos, also does not qualify you for a TIF.
So, can someone tell me why we meet the “but for” test for the TIF when Pleasantdale and these other two towns did not?
IL Assoc. of School Boards has an opinion about TIF. Interesting!
Why would there be no need for a TIF if the entire amount is refunded back to our schools? This statement shows a fundamental lack of understanding on how a TIF works.
Why would there be no need for a TIF if the entire amount is refunded to our schools?
Here are some reasons or issues off hand:
BOARD HAS NOT REFUNDED NOTHING
1st, we are assuming that Riverside board would indeed refund the money. To date they have not said they would.
HOW MUCH? HS? JC?
2nd, let me be clear on the refunding that corbi328 is suggesting: is it indeed ALL of the schools, or just for district 96? I have only seen district 96 monies refunded in the EDC proposal. The kids in Riverside DO get older than 8th grade. There is HS and jr college.
JR college is now a very important channel to get to the next step of being a productive member of society with regular 4 yr colleges so crazily expensive. My neighbor has two bachelor degrees and , at 49 yrs old, just got a two yr degree from triton and he is working as stable as he ever has in his adult career. triton – good.
Schools and charm are 1a-1b as Riverside’s core assets. IF schools can remain unharmed, that IS a start. Let’s see if the other essential asset, charm, can be left ok.
I believe a tif in RIverside can cause harm to the charm. If the tif does not fit, you got to ….
See below.
EMINENT DOMAIN – NASTY STUFF UNBECOMING OF A FRIENDLY TOWN
3rd, eminent domain is enabled under a TIF. THIS is how TIFs work best. It gives power and extra functionality to the municipality that it did not have before. TIFs lower the bar the muni has to satisfy to be a ‘public good’, which is the critical condition when exercising eminent domain. This is why on page 3 of the Mckenna TIF document it plainly says that, if the properties in the TIF district are developed, it is in the public good.
Why is this bad and a reason not to do a TIF? Answer: it would only be bad in a small landlocked town like Riverside where there are no properties that are vacant, or with deadbeat of absent owners, which is the real reason the state gave towns the extra ability to exercise eminent domain under a TIF.
The reason it is bad for Riverside is that eminent domain would not be exercised to remove a slumlord, which MIGHT be a public good, but would be used to remove good residents who pay their taxes, keep up their houses, and whose lives would be very upset in this eminent domain action.
GARAGE-A PUBLIC BAD
For two families so impacted the ‘public good’ is a parking garage that is really a way to satisfy the 47 extra parking slots that were promised to two developments, the VC and the Arcade. Without a tif, this would violate Illinois’ prohibition to do eminent domain to support private economic development. WIth a tif, this would be allowed.
In addition to the garage really being a way to provide subsidizing to million dollar developers – not a true public good- the garage would imply lots of cars, lots more than now, and more high density residential developments than now. This type of activity is not only NOT in the public good of riverside, it would be BAD for Riverside; it would be bad for a core asset of riverside, its charm.
An 1882 victorian single family home would razed for a c-ment multistory garage blotting the landscape of riverside’s center of town. Instead of Mayberry, and a distinct sense of place, you’d get anytown. All for EAV which might not even happen since we just gutted that which makes people come here. ‘it is the charm, stupid.’ As a result of this action, there would be less friendliness, more crime, more congestion, less charm.
It would be a public bad.
In the current situation, I can authoritatively speak on two of the families that would be impacted by such action. There is an elderly lady and her son who has been in the town 43 years with a heart condition and who is greatly upset with even the prospect of this eminent domain action.
Further, there is another family with three kids in each of the three schools whose life would be turned upside down with consequences such as not being able to go to college and the like if they had to move. I am that family, btw.
My neighbor and I are like ‘the canaries’ before we as a village go down the dark mine of the TIF. Before it actually gets enacted and before we actually get evicted, we can report to the ones making the decision, the representatives of the villagers, the board of trustees- actually neighbors of these people – on the impact of this aspect of the TIF. This is one of the reasons that the Illinois legislature gave a 120 day review period for the tif.
The canaries say it is not good. the biggest problem is how is takes away the freedom, the control, over your biggest asset, your home, and therefore the state is coming into the very inner workings of the most important part of ourselves, and taking away freedom. It impacts, as I said, significant financial decisions on college, for example, that would have far reaching effects generations to come.
For this, my late father suffered so much in the Ardennes in his tank in 1944? It is ironic, and really heart breaking, that I heard the TIF presentation on the same day that I attended the very moving Veterans Day programs at Central and at Hauser this last Nov 8-9. The common theme in both programs were how our veterans sacrificed so very much that others, both presently, and those coming after them, would enjoy basic freedoms.
Other people whose property can be taken can experience similar kinds of impact, to varying degrees, some worst than us, and others maybe not as bad. thus our canary nature.
Other aspects of eminent domain under a tif that is problematic:
a) the basic unfairness of the tif boundaries in general and of the choice of the ones whose homes would be taken, as well as
b) the unjustness of ‘just compensation’.
UNFAIR
first, on the basic unfairness: does anyone think that some ‘bigwig’ – there’s a 1940s term from my father – would be selected to have their homes displaced? this is a similar argument on the boundaries that were set for the present TIF district. One sees zig zags. One wonders if there were some one with a connection to the ‘powers that be’ when they were not included (more on this later).
During the public comment meeting, where I got just 5 minutes to express myself on this subject (as you, dear reader, can see, I have a lot more than 5 minutes to say on this; and THIS is the blanking SHORT version!), a fellow TIf district member surveyed it all and scratched on a piece of paper,
‘are any of the board members in the tif district?’.
Our crime? Living near the downtown on top of the train tracks! I guess our crime is that our EAV is not as much as our curvilinear neighbors’. Sorry. Our bad. What’s this, sectarian strife in the middle east, I mean, america? the straights vs the curves? Aren;t there more modest houses in the curved streets that might not be pulling their fair share of EAV? But we are picked. smells unfair.
We’re a team, guys, the people in the multi familiy zones tend to support the schools at a disproportionate rate since they tend not have kids consuming those services, for example.
UNJUST COMPENSATION
Part of eminent domain law is that the ones being forced to move would receive ‘just compensation’. It turns out that ‘just compensation’ is very nebulous. It is supposed to be ‘at least fair market value of the property’ and some moving expenses.
The calculation of fair market value, however, is tricky in general and in Riverside, almost impossible to set fairly. Since Riverside was not developed by just one or two developers, there are hardly any two houses that are just the same as there is in other towns where an artificial appraisal based on comparable features can more reliably be done.
For the ones that would be eminent domained to get close to just compensation, in the end, would depend on how good of an attorney they could secure. And of course, that puts a drag on the final compensation that the ones being forced to move would get.
Even if the families received closer to ‘just compensation’, or ‘fair market value’, this is not enough to get similar housing that one has now. *IF* the families wanted fair market value at this time, then they would simply sell. Since they have not chosen to sell, this means that they have weighed the benefits of selling and saw that it does not allow them to have the kind of housing that they choose – which is to say, their current housing.
I do this all the time. My house is my only asset (one of the ironies in this is that the people who have the least in town, no big fancy multiple properties and stocks and bonds and other fancy assets, have THEIR properties displaced.), and I am always checking and caring about its value. It is why I picked the property that I did – its location -close to everything and the southern light is spectacular – and now this?
Yes, The best laid plans of Mike and men have gone awry.
This kind of decision-making dynamic happens all the time when a homeowner is weighing whether to renovate or move when the present house is found lacking in some way. I have seen many many times w/ people I know who have gone through this process, and they pick renovation since they see that they would invariably have to pay a ton more to get a similar level of house when bought anew. This is primarily due to how high real estate in a desirable community such as Riverside has spiked up.
This links to the next reason a TIF is not right – for Riverside.
TIF ELIGIBILITY SUSPECT
4th) The eligibility criteria for a TIF in Riverside seem tenuous at best. Specifically, Riverside does not seem to satisfy the ‘but for’ test that says if there is development going on without a tif already, then a town should not have a tif.
There are currently at least five major development projects in and around the cbd, the proposed tif district, that are going on now BEFORE THE TIF was enacted. delaplaine crossing, burlington townhomes, arcade, village center, and the pine condo conversions.
That the consultant made a odd zig when drawing the tif boundaries and excluded the village center – even tho it is smack dab in the middle of the cbd, the area that is supposed to recv the tif funds is insincere.
Also, the village made an resolution contrived to allow the arcade to recv tif funds (res 62) despite it failing the ‘but for’ test. This also smacks of tricky manipulations to get around the spirit the state legislature designed when it created TIF law.
Like a similar town, Burr Ridge, Riverside is not suited for a TIF. The first line of the judge’s verdict against Burr Ridge’s attempt at a TIF is that Burr Ridge is one of the most affluent areas in the state. I can imagine another judge rendering a similar verdict if it came before him.
NO PLAN INFORMING TIF
5th, and possibly, the worst problem for a TIF in Riverside, is the lack of a comprehensive plan that is community based and approved that would affirm those things that are best for Riverside and that would animate, inform, and guide the TIF. Without this guide, we would not know if we are mucking up Riverside, breaking it, violating its core assets, or improving and making Riverside better.
Without such a guide or plan, the TIF, then, would provide incentives to developers who are out to aggrandize themselves. This is expected of developers. that is their mission. that is their job. they are not charitable trusts. They hold the almighty dollar and short horizons primary and not the best interests of the Riverside town.
ADMIN / BOARD QUESTIONABLE JUDGEMENT
You can say that the village ordinances can guide development. However, the village board and admin has shown a disdain for the ordinances by granting variances to them in the VC case and by allowing subdivisions in the curved streets part of Olmsted masterpiece. this is an example of the proverbial frog boiling in the pot one degree at time and not knowing it. at this rate the charm of riverside, asset 1b (or 1a, depending on your point of view, but clearly tied with the schools), would be seriously eroded.
The board has shown a too eager willingness to help developers and to erode a core asset of Riverside already, without the tif. As administrators of 20 million dollars of tif funds for 23 years would not be a wise thing to do right now.
It short, it would not be good for riverside to pursue a tif in the manner that is being talked about now.
miket
I live in Elmhurst and we are a TIF district. People’s homes were purchased by the city for the 24 million dollar library to go up. The owners of the homes did not want to move but if they did not accept the city’s offer, I was told, they would have been ousted by way of eminent domain. Restaurant owners had lawsuits fighting to keep their parking lots from the city taking over for public parking. Building owners were trying to keep their buildings from being taken over for new mini strip stores. Is this what you want to happen? I grew up in Riverside and 2 generations of my mother’s family grew up there. I see no reason for a TIF to be voted in. The only people that win in this situation are the developers. Riverside is a one of a kind and that will cease to exist if this happens. I speak on behalf of the Olson family and we feel it would be a shame! Please do your homework before you vote!
[...] Schools for Riverside, Illinois, faced a Village government attempting to adopt a TIF. Go to this link to read the perspectives of those people who have knowledge of the impacts of TIFs on school finances:  http://www.riversideinfo.org/how-tif-districts-can-impact-local-schools/ [...]