Residents who live within Austin’s Tax Increment Financing (TIF) districts should expect a change in their property tax bills this year.
“When tax bills arrive soon in mailboxes, more than 200,000 property owners will have a TIF line item that details the amount they are paying into a TIF fund,” said Cook County Clerk David Orr in an announcement last Thursday. “As a longtime advocate for TIF transparency, I’m pleased that this enhancement means tax bills will accurately reflect property owners’ true distribution of tax dollars.”
Before this new measure was implemented, tax bills only showed homeowners the properties that were located within TIF districts and referred them to the Clerk’s website if they wanted more information.
According to the non-partisan Civic Federation, the added information, while a step in the right direction, should be supplemented by information that allows the raw data to be placed in proper context.
“The new tax bills, while helpful, will not (and cannot) provide a complete picture of the full fiscal impact of TIF on taxpayers and should not be viewed in isolation from a broader understanding of how TIF works and what it does not do. Contrary to common belief, it does not divert millions of dollars from schools and other jurisdictions to municipal projects in Cook County.”
To some observers, however, the underlying problem with TIFs aren’t that they’re being diverted to municipal projects, but to private developers in areas that aren’t blighted.
A 2011 analysis by Chicago Talks, which was reported by its partner site Austin Talks, found that “more than half of the nearly 200 private-sector TIF projects approved citywide between Jan. 1 2000, and July 30, 2010, are clustered in or near the Loop.”
The TIF program is designed to mitigate urban blight by promoting economic development and job growth in areas such as Austin, which suffer from a dearth of private investment. But the Chicago Talks analysis discovered that “[o]f the 184 private-sector TIF projects authorized in Chicago since 2000, just four were for Austin.”
2013 Property Tax Rates Set
In addition to announcing the new transparency mechanism, Orr also released the 2013 Cook County property tax rates to be reflected in bills due August 1.
“The City of Chicago’s composite tax rate increased 6.8 percent in 2013, while the equalized assessed value (EAV) of all property fell 4.4 percent from the prior year. Chicago residential tax bills on average will increase 0.5 to 1.5 percent,” according to a statement issued by the clerk’s office.
While the tax levy for all of the city’s agencies combined increased by 1.3 percent, or about $46 million, since 2012, the entire increase was captured by Chicago Public Schools and the Chicago Park District.
According to Bill Vaselopulos, the clerk’s director of real estate and tax services, higher rates don’t necessarily mean higher bills.
“If values drop and levies remain flat or increase slightly, the rates go up,” Vaselopulos said. “That does not mean your tax bill will go up because the higher rate will be multiplied against a lower taxable value. And identical properties on the same block can have vastly different tax bills depending on their exemptions.”