Elkville hopes TIF will help; hearing held this week; benefits slow to come

"We haven't had a new home built in Elkville in years," says Mayor Lance Bedar, whose comments mirror the fact that much of the town's economy is gone.

It is a town of 1,000 that once benefitted from no less than three coal companies, its own newspaper The Elkville Journal, the Schwarz Lumber Co., Bowlins Foodland grocery, Downs Furniture, service stations and shops along Rt. 51.

It still benefits from some great people and some great schools, which are feeling the pinch of declining dollars in education.

The town has annual revenue of $51,699 in real estate taxes (2012 receipts) and another $33,241 in state sales tax income (Illinois Dept. of Revenue figure) and an income from water and sewer service. But, that pales by the $1.2 million in Du Quoin sales tax or $430,058 in Pinckneyville.

Bedar and his board know they have to do something to revive the community and provide its needs. One place to start is a Tax Increment Financing district (TIF) and public hearings on that proposal were held on Tuesday.

"We're at about step three or four on a seven-stop process," Bedar said.

Tax Increment Financing helps towns attract private development and new businesses. It is starting to see success in Du Quoin.

Any more, most often improving towns requires a public investment to reduce the extra cost and risk that private development faces in such areas. The public wishes to see this development occur, but without increased taxes or the reduction of other necessary services and projects that would be required to pay for the public investments that development usually requires.


When a TIF redevelopment project area (often called a TIF district) is created, the value of the property in the area is established as the "base" amount. The property taxes paid on this base amount continue to go to the various taxing bodies as they always had, with the amount of this revenue declining only if the base declines (something that the TIF is expected to keep from happening) or the tax rate goes down. It is the growth of the value of the property over the base that generates the tax increment. This increment is collected into a special fund (the Special Tax Increment Allocation Fund) for use by the municipality to make additional investments in the TIF project area. This reinvestment generates additional growth in property value, which results in even more revenue growth for reinvestment.


A tax increment is the difference between the amount of property tax revenue generated before TIF district designation and the amount of property tax revenue generated after designation. Only the new property taxes generated by the incremental increase in the value of these properties after the TIF is established are available for investment in the TIF.

The redevelopment improves the community, which, in turn, grows the value of properties and generates new real estate taxes.

School districts--(and Elkville schools are financially strapped)--don't like TIFs because schools no longer benefit from the natural growth of assessed valuations. Typically, they get what they always got and any new money goes into the TIF development fund, not to the schools.

Typical TIF Projects

TIF funds may be used for costs associated with the development or redevelopment of property within the TIF, allowing blighted, declining and underperforming areas to again become viable, and allowing these areas to compete with vacant land at the edge of urban areas.

Typical projects include:


•The redevelopment of substandard, obsolete, or vacant buildings.

•Financing general public infrastructure improvements, including streets, sewer, water, and the like, in declining areas.

•The development of residential housing in areas of need.

•Cleaning up polluted areas.

•Improving the viability of downtown business districts.

•Providing infrastructure needed to develop a site for new industrial or commercial use.

Illinois law specifies a number of requirements that must be satisfied for an area to qualify for Tax Increment Financing, beginning with identifying the project area and the physical and economic deficiencies that need to be cured. These deficiencies are often called the "blighting requirements".

Much of Elkville qualifies.

In addition to meeting the blighting requirements the town must also demonstrate that these conditions will not be addressed without some local action. What is often called the "but for test", calls for the municipality to show that 'but for' the public investment provided through the TIF, effective redevelopment or development will not occur.


Along with meeting these requirements, the town must also prepare a plan laying out the actions that the municipality intends to take to improve the area, and a budget for the TIF district that includes the total TIF-eligible costs. Municipal officials and a Joint Review Board, made up of representatives from local taxing bodies, must review the plan for the redevelopment of the TIF area, allowing the various taxing bodies to provide their input and opinion on the matter to the municipal authorities. Following this, a public hearing must be held so that residents and other interested parties can express their thoughts on the subject. 
Once these steps are completed, the proposal to establish the TIF district and engage in Tax Increment Financing must pass through the same process as any other ordinance proposed by the municipality, receiving approval by the municipal legislative body. Once approved by the municipal governing body, the mayor or village president may sign the ordinance into law. As the establishment of the TIF is a municipal function, no state or federal approval is required.

At this writing, Bedar has no idea as to what the possibilities from a TIF district might be, nor how much money it could generate.

"It's going to take time," he says.

But, he is certainly sincere in trying.