WJBC Voices: Understanding TIF investments

By Mike Matejka

As we near another local election, understanding what a Tax Increment Financing (TIF) district is and its role in economic development seems unclear to many I talk to.

The popular reaction to investment I hear most frequently is, “they are taking money from our schools.”  Or, “this money would better be spent on road repairs.”  In Normal, this has become an election issue.

When we read that the proposed Uptown Trailside East project is to receive tax increment returns from Normal, the presumption is often that a check is presented to the developer.  The key to public financial involvement is the word “increment.”   The developer gets a tax break from the Town, but only after millions are spent and the new structure enters the tax rolls.

Currently, two of the lots proposed for Uptown Trailside East pay absolutely zero in taxes to local schools and the Town.  When a five-story, multi-million dollar building goes up, the tax valuation on the property will rise considerably.  The first few years of the project, the developer will get a partial tax break.  Eventually, that break goes away and Unit 5 schools, Heartland Community College, Normal Township, the Normal Public Library and the Town of Normal will see more cash coming their way.

The next comment is usually, “the developer should pay the full costs.”   Creating Uptown Normal didn’t happen by accident.  There is a 15-plus year plan here to revitalize what used to be “downtown” Normal and to create new buildings and new tax wealth, through urban revitalization.   A developer wanting to build on a cornfield, thus creating more sprawl, shouldn’t need a tax rebate to relocate.   Convincing a developer to invest in an urban core, where construction costs are often higher due to work staging and digging underneath old street, water and sewer lines, takes a little extra.

So why not just let that developer sprawl onto rural fields?  Number one, we are preserving that valued central Illinois farmland when a developer comes back to the center.  Number two, Uptown Normal is gaining national prominence as an exciting place to locate.  Those new employees in the Uptown Trailside East office will dine and shop in convenient locations, thus boosting local taxes again.

Finally, a vibrant urban core is what attracts young people to a community and convinces local university students to stay, which brings a human talent pool locally.  Parents considering ISU or IWU for their young person see an attractive, accessible and diverse district, pedestrian close to campus.   Any TIF requests from developers deserve extra thorough scrutiny, but don’t be fooled that somehow that investment is costing the taxpayer and local schools.  By creating more wealth through new construction and revitalization, the taxpayer should welcome new development, as that spreads the tax burden.  New development means construction jobs today and long-term positions in the local community.   Creating and attracting investment in a global and competitive economy is extremely difficult.  Those investments today hopefully create a vibrant community for tomorrow.

Mike Matejka is the Governmental Affairs director for the Great Plains Laborers District Council, covering 11,000 union Laborers in northern Illinois, Iowa, Nebraska and South Dakota. He lives in Normal. He served on the Bloomington City Council for 18 years, is a past president of the McLean County Historical Society and Vice-President of the Illinois Labor History Society. He currently serves on the Normal Planning Commission. 

The opinions expressed within WJBC’s Voices are solely those of the Voices’ author, and are not necessarily those of WJBC or Cumulus Media, Inc.


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