City gave taxing districts extra incentive to sign off on TIF extension
Some supplementary information for those who are interested in the East University Avenue tax increment financing district:
Within the past month, the city of Champaign revised its deal with the nine taxing districts, which includes the Champaign school district, to give them another reason to sign off on the 12-year extension of the East University Avenue tax increment financing district.
I typed out the insipid details of the extra incentive for this blog post before realizing it is a bit convoluted (and frankly, kind of boring), so e-mail me if you want the full explanation. But what it comes down to is that a TIF district withholds property tax revenue from other taxing bodies' budgets, so you can imagine why, at least in the short term, they would not be too keen on renewing the district for 12 years (although the ultimate goal generally is to get more revenue in their budgets after the TIF expires).
Under the new deal, the nine taxing bodies will get extra property tax revenue in their budgets more quickly, and the East University Avenue TIF fund (which the city uses to invest in economic development incentives and infrastructure improvements in the TIF district, which comprises portions of the East University Avenue and First Street corridors) will get less.
The biggest beneficiary of the deal is the Champaign school district. Under the new plan, it will have an extra $338,837 in its budget.
City planner T.J. Blakeman said without the new deal, it may have been tough to get the school board to sign off on the TIF extension. City officials were not sure where the school board stood, since members never took a preliminary vote.
"I think it would have been close," Blakeman said. "We knew we needed to do something."
So city officials came back to the school board with this agreement (and gave the same deal to the other taxing bodies), and the school board signed off.
The agreement helps the other taxing bodies deal with their tight budgets, Blakeman said. Even the city: because the city of Champaign's general operating budget is separate from the TIF fund, it will also get an additional $119,956 for citywide operations. Had that money been in the TIF fund, the city would only be allowed to use it for improvements to the TIF district.
Here's a breakdown of how much revenue is expected to go into the other taxing bodies' budgets during the next few years under the agreement, depending on property values during the next few years:
Champaign Unit 4
City of Champaign
Champaign Park District
C-U Public Health
Champaign County Forest Preserve
City of Champaign Township
This is all on top of what officials call a "carve out" renewal of the TIF district. When the extension goes before the city council in December, they'll be voting to renew only half the TIF district. The other half would be released into the general tax base, which would allow the nine taxing bodies to claim half of what would be their property tax revenue. This was another feature of the renewal presented as a compromise between the city and the other agencies.
Hope that explanation gives some of you taxpayers a little bit better understanding about how tax increment financing districts work. The TIF extension will be up for a public hearing during next week's Champaign City Council meeting, and the council is expected to take final action on Dec. 7.