County T.I.F. District Report released

August 15, 2006
Press Release
Real Estate and Tax

Cook County Clerk David Orr announced the release of the annual Tax Increment Financing (“TIF”) District Report today, summarizing expected revenue distributions to Cook County TIF districts for the 2005 tax year. This year, for the first time, Orr said, the report is on the County Clerk’s website,

Orr noted that the rapid growth of TIF districts over the past few years has increased public interest in the use of this financing mechanism, spurring his office to place the report on the internet for easier access. The report had previously been available only in printed format.

“There’s no secret why TIFs have become controversial,” said Orr. “While they are intended to help blighted areas, they also place a greater burden on other taxpayers to support the schools, parks and other services. This report should help individuals and municipalities to understand the dollars involved in this debate.”

The report shows:

  • Within Cook County, 375 TIF districts are listed on the report for the 2005 tax year. 136, or 36.27% of these are within the City of Chicago.
  • Total 2005 TIF increment tax revenue, found on page 69 of the report, is $686,217,731—up 14.90% from 2004’s annual report figures of $597,235,192.
  • Largest City and Suburban TIFs: City of Chicago’s Central Loop TIF, found on pages 5 and 6 of the report, with revenue of $98,267,070 (see final totals on page 6) and Hoffman Estates’ Sears TIF, found on page 49 of the report, with revenue of $23,321,515.
  • Total countywide TIF incremental value is 10,031,520,984, which represent the difference between the total equalized assessed value (“EAV”) of all TIFs within Cook County for 2005 (16,996,276,741) and the frozen value of the parcels located within those TIFs (6,964,755,757). (See countywide totals on page 69 of the report.)
  • 152,383 or approximately 9% of the county’s total 1.7 million properties are within TIF districts for 2005.

Orr noted that with countywide TIF incremental value now at a little over 10 billion, the increment represents about 7.5% of the county’s total current EAV of approximately 133 billion. If that increment were available for calculating tax rates, the county’s overall tax rate, and that of the Forest Preserve, would each be about 7% lower.

“However,” Orr cautioned, “whether growth or values would have been the same without the TIF, is an obvious question. I’m sure there are great variances throughout the county. If growth occurred because of a TIF, its impact on the tax rate becomes something of a chicken-or-egg question.”

The report details anticipated revenue to be directed to municipalities as a result of this financing mechanism, listing the totals for all Cook TIF districts. Under Illinois law, TIFs are a redevelopment tool available to municipalities for blighted areas and for other areas that meet certain statutory criteria. To generate the redevelopment funds, the value of properties within the TIF are frozen with respect to generating revenue for the ordinary taxing districts serving properties within the TIF, such as schools, park districts and local municipalities. Increases to the properties’ values, the “increment” over the frozen values, are separated out and generate revenue for the TIF.

Orr said that when his office calculates tax rates, this incremental value is withdrawn from the taxable value used to compute rates. The withdrawal may increase district tax rates, since schools and other districts generally receive the full amount of their levy, subject only to limits imposed by tax cap restrictions. To provide the revenue requested by the levy, rates thus will generally increase in an amount proportionally equal to the value withdrawn from the base due to the TIF, though there may be variances due to rounding of the tax rates. Any increase in tax rates affects all properties within the taxing district.