By Howard Packowitz

BLOOMINGTON – The debate whether tax increment financing should be used as an economic development tool is shifting to the south side of Division Street.

A proposed resolution setting guidelines for TIF use will be presented Tuesday night to the Bloomington City Council.

TIF districts freeze property taxes in designated areas – typically blighted areas which are generating little tax revenue – and shifts the increase in tax revenue the project generates back into the development.

Taxing bodies like District 87, dependent on property taxes to fund schools, don’t receive that increased revenue while the city can collect sales taxes from new business during the life of the TIF.

District 87 Superintendent Barry Reilly said the East Empire TIF, with Dick’s Sporting Goods, has added to the city government’s sales tax base, but the school system has yet to benefit from gains in taxable land values.

“That seems to be going veery well, and that increment has grown already. That’s great for the community,” said Reilly. “The reality is the (school) district is not seeing any of that growth, nor is any other taxing body.”

Reilly said there needs to be clear thought process before TIF’s are considered for other projects, like Eastland Mall redevelopment.

“We’ve lost some anchor stores there. That’s a concern of everybody. We all want to see that area thrive,” Reilly said.

“State Farm has left the downtown building and that’s a question mark for the future.”

The resolution states there are other incentives besides a TIF to spur development. The proposal also requires the city manager to write a report detailing talks with developers, maintain communication with affected taxing bodies, and minimize the lifespan and number of parcels covered by the TIF.

Howard Packowitz can be reached at [email protected].