Hot weather means the developers of summer are back out there swinging for the fences, hoping for just one more tax increment financing district. Their hope is eternal: “If we don’t tax it, they won’t come.”
Collinsville is trying to decide whether the double play of a tax increment financing district atop a higher sales tax district will bring back the blighted commercial area along Collinsville Road and the mixed residential and commercial areas along St. Louis Road and up Illinois 157 to Interstate 55-70, excluding the big shopping center. The grand plan calls for $59 million in investment, and that is before financing costs are figured in.
City leaders are talking about a streetscape, so new streetlights, sidewalks and roads. They might need to buy up properties to assemble land for a private development. They need to secure areas from flooding. They may need to give money to people whose properties need fixing up. They are also talking about drawing businesses by boosting technology, or rather building their own fiber optic network and expanding their wireless Internet service.
They are right to be looking at the area, because as a whole the taxable value of the 346 properties dropped $1.5 million between 2009 and 2014.
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But why take 23 years of future property tax growth from other government units and then plop a 1 percent sales tax atop that? Apparently they need both taxing mechanisms to make the deal work.
The city bought the approval of Collinsville’s school district by giving them 42 percent of the money generated by the tax increment financing district. Take some money out of the pot, and other money must replace it if you are going to spend $59 million. That’s where the sales tax is needed.
Just because the school district signed off, doesn’t mean property taxpayers are off the hook. Taxing bodies typically replace dollars lost to tax increment financing by asking all property owners for more money.
Collinsville’s sales pitch includes suggesting that tax increment dollars will replace the need to use property taxes on street and sidewalk improvements, that they cannot compete with other communities without the development tools, that property values will rise and that rising sales taxes will decrease the reliance on property taxes for police and fire protection.
Residents should expect city leaders to show them how that works in black and white, with dollar amounts attached. They claim decisions have yet to be made, so there are no exact dollar amounts on finance costs or revenues, but you know they’ve run the projections.
Decades of experience with tax increment financing districts across Southwestern Illinois, not to mention a glance at most property tax bills, would argue that the development strategy of taxing many so city leaders can pick a few winners has struck out.