TIF District

In 2022, the Village approved the 2022 Downtown Strategic Action Plan after an extensive study-period, which included significant input and feedback from the public. The Downtown Strategic Action Plan established the future vision, goals, and priorities for Downtown Itasca. The Plan also provided for specific strategies and action steps to make the Plan a reality. One of those strategies is to establish a TIF District in the Downtown.

As a potential tool to support reinvestment and spur redevelopment in the community, the Village is currently exploring the establishment of a Downtown North TIF District.

Tax Increment Financing, known as TIF, helps local governments attract private development and new businesses using local resources that do not depend upon an increase in taxes or reduction of other services. TIF projects also help to sustain and grow the equalized assessed value (EAV) for the proposed redevelopment project areas. The EAV growth and private investment mean more revenue to help the Village meet its other needs. As a result, the community as a whole, not just the area targeted for TIF, improves.

History of TIF Districts

In the 1960’s and 1970’s, the federal and state governments, including Illinois, began cutting back economic development programs that cities could use to revitalize communities. TIF districts are one of the few remaining tools that local governments can use to attract new business, invest in infrastructure and rebuild blighted areas. TIF districts are a popular and effective redevelopment tool, used in 47 states across the country and in over 250 Illinois cities.

For more information on the history, and laws governing TIF districts, please visit the Illinois Tax Increment Association.

  1. How Does a TIF District Work?
  2. Is a TIF District a Tax? Will it Raise Taxes?
  3. How May TIF Funds be Used?
  4. Do TIFs Hurt Other Taxing Bodies?
  5. Why Offer Incentives to Private Developers?
  6. Is there some other way to attract development without TIF?
  7. What communities in Illinois use TIF?
  8. What is the Life of A TIF District?
  9. Who monitors the TIF process?
  10. Who has the Village Hired to Help with the TIF District?
  11. How do I Stay Current on the TIF Progress?

A TIF District's revenues ("tax increment") come from the increased assessed value of property and improvements that occur within the District. Once a TIF District is established, the "base" assessed value is determined. As vacant land and dilapidated properties develop with TIF assistance, the equalized assessed valuation (EAV) of those properties increases. New property taxes resulting from the increased assessed valuation above the base value create an incremental increase in tax revenues generated within the TIF District. 
The "tax increment" created between the "base" and the new EAV is captured, deposited into a special municipal TIF account and used solely for economic development. The real estate tax increment can be used as a source of revenue to reimburse certain costs for public and private redevelopment projects either by issuing TIF Revenue Bonds or by reimbursing developers on a "pay-as-you-go" basis.

TIF District

When a municipality decides that TIF might be a valuable tool for economic development, a feasibility study is prepared. The feasibility study includes an inventory of any existing housing in the study area, and determines whether the area is eligible for TIF according to State regulations.

If the study area is found to be eligible, the municipality, or a consultant hired by the municipality, prepares a plan for redevelopment of the area. This plan is presented at a public meeting, where initial feedback from the community can be assessed. In addition, members of the public and community organizations can sign up on an “interested parties” registry that the municipality will use to notify persons and organizations about the TIF process.

The Village’s Downtown North TIF Qualification Report and TIF Redevelopment Project & Plan can be found here.

Next, the municipality will set a date and time for a formal public hearing, and will then notify each of the taxing bodies that levy taxes in the proposed district. Representatives from each of these taxing bodies meet as a “Joint Review Board,” to review the redevelopment plan and make a recommendation to the municipality. A public hearing is held next, at which time comments from the public are taken.

After that, the municipality can choose to enact tax increment financing. If TIF is adopted, the district may be in place up to 23 years. Each year, the municipality is required to account for revenues and expenditures to and from the TIF fund. Throughout the life of the TIF, the municipality can make improvements and offer incentives to encourage the redevelopment of the area according to the objectives of the redevelopment plan.

Citizens can take an active role by attending public hearings and meetings to voice their opinions on the TIF proposal. Notice of the availability of the plan and the date and time of a public hearing must be sent to all property owners within the proposed TIF District, as well as other interested parties.