The Springfield City Council engaged in a heated debate Tuesday over grants for Tax Increment
Financing (TIF) districts. Frustration mounted as supporters of the ordinances
questioned why their fellow council members sought further discussion on this
initiative but not others, suggesting that it came down to the demographics of
those who would benefit from the money.
TIF
districts can be established by cities in areas that have been
identified as economically stagnant or unlikely to attract private investment.
TIFs are generally intended to revitalize those areas by funding public and
private redevelopment projects and attracting private investment.
To establish a
TIF, the municipality first assesses the value of the area. Tax revenues
generated from the starting value continue to be collected by existing tax
bodies. Any surplus increase in tax revenue
generated by other improvements to the area is set aside for grants to be reinvested within the
same district.
The theory is
that if TIF money is used by homeowners or business owners to improve their
properties, private investors will be more likely to see the area as stable and
profitable, bringing more business to the area. Ward 9 Ald. Jim Donelan
provided an example.
“Somebody asked years ago, ‘What do you do if
in a TIF district someone builds a new garage?’ That's what you want, because
it adds to the tax rolls, adds to the increment, adds to the reinvestment in
the area,” Donelan said.
The two proposed TIF grants discussed Tuesday concerned
the Far East and Springfield Housing Authority Madison Park Place areas. Those
TIFs are set to expire in 2030 and 2034, respectively, according to Ward 2
Ald. Shawn Gregory.
Ward 7 Ald. Brad Carlson and Ward 10 Ald. Ralph Hanauer moved to further debate the
ordinances rather than consent to passage.
The conversation
around TIFs came shortly after the
committee had approved a change to an arterial street to allow for a private development project in Panther Creek subdivision on the west side of the city. Ward 6 Ald. Jennifer Notariano said she
supported the TIF ordinances and expressed frustration with what she saw as a
discrepancy in treatment.
““We see it every
week, we just saw it a few ordinances back (with Panther Creek),” Notariano
said. “Private investment is happening in the west. It's not happening on the
east side.”
Hanauer took
issue with the comparison, which he said was not apples-to-apples.
“There's a big
difference between private money and tax money,” Hanauer said. “People are
putting their rear ends on the line by doing that, by developing… I don't
disagree that we should be developing wherever, but people are going to develop
where they want to develop.”
Gregory asked
Hanauer for further clarification on his objection to the TIF money going to these specific areas on the east side. Hanauer responded that he had
questions on the TIF rules and had not had a chance to research it.
It was the need
for further research with which Gregory and Notariano took issue. Gregory
referenced a past TIF ordinance which was passed recently.
“You didn't go
check the TIF to make sure that it was legal,” Gregory said. “But there is a
difference when we go to do things for the different demographics of people.
We’ve just seen it.”
Notariano added
that the point of the TIF was to encourage more private development.
“That's why we
have the TIF, because the private money has fled,” Notariano said. “So if there
are individuals who own businesses and own homes in these TIF districts and
want a grant to reinvest in their businesses
or homes, who are any of us to deny them that?”
