The city is proposing creating a TIF district that would incorporate a lot of the residential areas to the north of the SIUC campus. Essentially, when a city creates a TIF district, it sets a baseline property tax. Any property tax increases on properties located within the district go into a separate fund. Part of the money allocated to the fund goes into the city's general fund, the city can only use the other part for improvements within the TIF district, such as sewer upgrades, sidewalk repair, etc.and to offset any initial investment by the city in the district. After the TIF district expires, all of the taxes collected go into the general fund. Typically, cities use TIF districts to revitalize commercial areas and the current TIF districts in Carbondale primarily encompass those sorts of properties. However, there is nothing in the statute forbidding their use in residential areas although it would have to meet the same requirements as a commercial area, i.e. the area must be designated as blighted, it meets the "but for" standard and the city must put forward a plan as to the use of TIF funds. TIF Here is one way it would work:
"For example, assume that a municipality wants to develop an area that includes two parcels that contain substandard commercial buildings. Let’s also assume that both of these parcels are paying $30,000 per year in property taxes. However, the municipality finds that by making an investment of $500,000 to rehabilitate the buildings on the two parcels and provide necessary infrastructure, private developers will commit an additional $2,000,000, making the commercial buildings available for new use. This additional investment causes the property to increase in assessed value, for example — and conservatively — leading to the tax paid on each parcel going from $30,000 per year in property taxes to $60,000 per year. The public and private investment would increase the total property taxes paid from $60,000 each year ($30,000 per parcel), to $120,000 each year ($60,000 per parcel). The project would result in $60,000 in new tax increment, which the municipality could use to off-set its original investment in less than nine years. After this initial investment is paid-off, the newly generated increment can be used for additional investments in the area."
"For example, assume that a municipality wants to develop an area that includes two parcels that contain substandard commercial buildings. Let’s also assume that both of these parcels are paying $30,000 per year in property taxes. However, the municipality finds that by making an investment of $500,000 to rehabilitate the buildings on the two parcels and provide necessary infrastructure, private developers will commit an additional $2,000,000, making the commercial buildings available for new use. This additional investment causes the property to increase in assessed value, for example — and conservatively — leading to the tax paid on each parcel going from $30,000 per year in property taxes to $60,000 per year. The public and private investment would increase the total property taxes paid from $60,000 each year ($30,000 per parcel), to $120,000 each year ($60,000 per parcel). The project would result in $60,000 in new tax increment, which the municipality could use to off-set its original investment in less than nine years. After this initial investment is paid-off, the newly generated increment can be used for additional investments in the area."
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