At the December 5 village board meeting, the Carol Stream trustees unanimously approved, as part of their consent agenda without discussion, a tax increment financing (TIF) district for property at the corner of North Avenue and Schmale Road. As I wrote previously, this TIF is a bad deal from a purely investment standpoint. It is based on the too-common philosophy that government can decide better than the private sector how to implement economic development (see, e.g., Solyndra, Fannie Mae, et al.).
I have received a number of e-mails asking for more information, so I want to clarify exactly what this TIF will do to our tax bills. Every dollar raised by the TIF will result in an additional dollar of property taxes paid by everyone who's not in the TIF. That's because, under tax caps, each taxing body's tax collections are based on last year's collections plus inflation and new growth, regardless of the size of the tax base. The whole "pie" of tax collections is divided in slices. Normally, these grow each year as property values increase. But if one slice stays the same size for 23 years (as under a TIF) everyone else's slice of the tax burden inevitably gets bigger. There is no free lunch - we will all pay extra taxes because of this TIF.
Thus, the TIF won't cost District 200 any money - this may have been unclear in my prior post. District 200 can collect the same amount of taxes it otherwise would have, but the tax burden will be proportionately greater on homeowners because the TIF property isn't paying its fair share. TIF districts simply shift tax burdens; they are not "free money." If taxing bodies like District 200 really wanted to help homeowners, they'd oppose TIFs. Unfortunately, District 200 was silent.