ACTION REQUESTED:
Title
Communication from the City Manager with a Request for a POLICY SESSION to Discuss TAX INCREMENT FINANCING DISTRICTS.
Body
BACKGROUND: The Peoria City Council held a Policy Session on Sales Tax Special Service Areas and Economic Development Incentives on January 26, 2019. A policy session on Tax Increment Financing Districts (TIF) was to be covered, but delayed due to lack of time. The TIF Policy Session information presented to Council included the following:
1. Tax Increment Financing Districts
Tax Increment Financing is a tool for economic development under Illinois law, 65 ILCS 5/11-74 that may be implemented by local municipalities. The purpose of TIF is to induce development in an area that has been declining or has been deficient in growth and development. Once the area is defined, a redevelopment plan is adopted to address the conditions that have led to a lack of development. The Council must conclude that development would not happen but for the use of TIF as an incentive to the developer. TIF activity is managed by the City of Peoria's Economic Development Department, Finance Department and other taxing bodies have input through the Joint Review Board.
The following explanation of Tax Increment Financing comes from the Illinois Tax Increment Association:
Tax Increment Financing is simple in concept. TIF calls for local taxing bodies to make a joint investment in the development or redevelopment of an area, with the intent that any short term gains be reinvested and leveraged so that all the taxing bodies will receive larger financial gains in the future. The funds for this investment do not come from current revenues, but from future tax revenues, not otherwise expected to occur. These new revenues are generated by increased public and private investment in identified, underperforming areas.
When a TIF redevelopment project area (often called a TIF district) is created, the value of the property in the area is est...
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