Two cities better off without tax increments

Collinsville and Fairview Heights are both in the middle of creating new tax increment financing districts. Both need to make changes in their respective business areas. Both should look at other mechanisms.

Fairview Heights is considering creating districts for vacant land along Illinois 159 and for the shopping district along Ludwig Drive.

Tax increment financing is supposed to be used when land will not otherwise develop. It is hard to argue that vacant land next to an interstate will not eventually develop without city government’s push.

The Ludwig Drive property is the former home to Circuit City, Sports Authority and several other businesses. It is certainly vacant and fairly blighted, but it also is only a few decades old. Will this infusion of taxes make that commercial property viable for longer than the 23 years a tax increment financing district will last?

Collinsville, too, is considering a large district along the Illinois 157 and Collinsville Road corridors that includes Fairmount Park horse race track. Residents and Collinsville schools have been vocally opposed.

Tax increment financing districts are areas in which cities fund improvements by taking on debt that is repaid by capturing all property tax increases from the district, usually for 23 years. Schools get the lion’s share of property taxes, so they are the big losers in the equation.

The rub is that schools and other taxing districts will still ask for the money they need and thus raise taxes for other property taxpayers.

Special sales taxes and enterprise zones are alternatives that don’t steal money from students or impact property taxpayers like tax increment financing districts. Collinsville and Fairview Heights should consider them instead.

This story was originally published April 14, 2016 at 2:00 PM with the headline "Two cities better off without tax increments."