Tuesday, August 12, 2008
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Illinois Department of Revenue recommends transparency with TIF districts

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[August 12, 2008]  SPRINGFIELD -- The Illinois Department of Revenue presented recommendations to Gov. Rod R. Blagojevich and the Illinois General Assembly on Monday to increase the transparency of tax increment financing districts, known as TIF districts, for property owners.

DonutsAccording to the report, more than $1 billion statewide is diverted each year from taxing districts to more than 970 TIF districts. Despite this diversion, public information on how the money is being spent and the effect on property tax bills for homeowners is difficult and time-consuming to access. Blagojevich accepted the recommendations Monday and pledged to review the study in hopes of finding a way to quickly increase transparency for Illinois' TIF districts.

The Department of Revenue study outlines a number of possible transparency improvements, including a suggestion that the General Assembly pass legislation to (a) require that specific TIF information and reports be made available online by the state and require that counties print the Web address on each tax bill; or (b) require counties or municipalities to send a mailing to all homeowners, providing aggregate TIF information for the county and a Web link to a state site where additional information about specific TIF districts is available.

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The study concluded that it is feasible to print TIF district information on property tax bills themselves, including TIF district names and identification numbers, the initial and current equalized assessed value of the parcel, and a Web address where specific information can be found.

The study, "Report on the Feasibility of Printing Tax Increment Financing (TIF) District Information on Individual Tax Bills," was mandated by Public Act 95-227, House Bill 3434, sponsored by Rep. Luis Arroyo, D-Chicago, and Sen. John Cullerton, D-Chicago. The study directed the Department of Revenue to determine what TIF district project information could be printed on property tax bills, including a description of the project, the initial equalized assessed value of the property in the project area, the current equalized assessed value of property in the project area, the impact of the TIF district on tax rates and projected future impacts of TIF districts on tax rates. The legislation also required the department to identify obstacles to providing the information and ways to overcome those obstacles.

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To conduct the study, the Department of Revenue surveyed and met with local property tax officials along with the companies that provide the tax extension and billing software. The department concluded that including specific information about each local TIF district on property tax bills, such as project descriptions, aggregate equalized assessed value and the impact on the tax rate, could make property tax bills too confusing.

The tax extenders and collectors responded that printing the requested information would add pages to tax bills, increase postage and slow the process of producing tax bills, while causing more confusion than insight.

"Just how much can we jam on the bill and expect the taxpayers to understand it?" one official asked during the study.

The study suggests that the bill sponsors' goals of transparency could be met by its recommendations to make TIF district information available on the Web and inform property owners where to find the information.


Currently, each TIF district has to file an annual report with the comptroller's office, but that information is not compiled into an easy-to-understand report, nor is the information made available online for property owners to view.

The Illinois Department of Revenue study can be found online at tax.illinois.gov. [To download Adobe Acrobat Reader for the PDF file, click here.]

[Text from Illinois Department of Revenue file received from the Illinois Office of Communication and Information]



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