By Michael Kleen ~ Published October 2, 2013 at the Rock River Times
In “Trouble with TIFs,” I discussed Tax Increment Financing (TIF), and how TIF districts deprive local governments and school districts of revenue. I also talked about how several studies have shown the unfavorable results of using TIF districts to address blight. In most cases a blighted area was no better off after TIF than it was before, and in some cases it was worse.
There is no doubt that when taken as a whole, Rockford’s experiment with Tax Increment Financing has been a failure. City leaders, however, continue to create new TIF districts and bet on their ability to stimulate growth, despite sobering evidence to the contrary. Not only have TIF districts failed to spur widespread development and raise property values, they threaten to drown our city in a sea of red ink.
In 2010, the consolidated balance for Rockford’s 30 TIF districts was $1.9 million in the red. That deficit was projected to increase to $4.1 million in 2022, before the trend would turn positive. Less than three years later, the consolidated balance for Rockford’s 32 TIF districts was $2.76 million. That deficit was projected to increase to $11.38 million in 2023, before reversing and ending in a small deficit in 2032. This projection was based on 1 percent annual growth of assessed property value and the assumption that no new TIF districts will be created, or no current TIF districts extended beyond their expiration dates.