Bloomington aldermen will discuss Tuesday when it’s appropriate for the city to use a tax incentive tool to stimulate economic development—and how to limit any harm done to District 87 schools.
Tax increment financing, or TIF, is used by municipalities to redevelop struggling areas. A designated TIF district diverts any new taxes generated by an increase in property values back into redevelopment of the area.
Municipal leaders say TIF provides incentives to land big projects without taking money out of their current budget. TIF has been used to redevelop Uptown Normal. Critics say TIF districts can needlessly erode the tax base, hurting school districts, and sometimes lack transparency.
The Bloomington City Council is working toward setting up a TIF district for the Washington Street corridor east of downtown. That stretch of Washington Street has struggled in recent years, with the eyesore-turned-vacant lot at the Coachman site and Chase closing its bank branch.
Related to that proposed TIF district, some aldermen raised concerns in February about the impacts of using TIF on District 87. That led to discussions between city and District 87 officials and the creation of the proposed resolution that aldermen will consider Tuesday. Among other things, it would require Bloomington’s city manager to “thoroughly consider the available alternatives to TIF” and “maintain communication” with other taxing bodies (like District 87) who might be impacted by a TIF redevelopment.
A second version of the proposed resolution includes additional language requested by District 87. That version would say the “council recognizes the importance of public education and is committed to limiting the financial impact that private development projects have on public schools.”
That version also asks the council to pledge to “ensure that each taxing district benefits along with the private developer in the redevelopment project during the life of the redevelopment project.”
The updated guidelines, if approved, would supplement the city’s existing economic development guidelines. That document spells out how and when the city offers incentives to developers.
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