What is TIF?

TIF GraphicTax Increment Financing (TIF) has proven to be one of the most effective economic development tools available to Illinois municipalities for financing development/ redevelopment. The Village of Clarendon Hills one TIF district on Ogden Avenue, between Richmond and Oxford Avenues.

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 reduced only if the base declines or the tax rate decreases. It is the growth in 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. 

After the redevelopment has occurred and the TIF District ends (usually after 23 years, the maximum allowed by Illinois law absent an extension), all of the taxing bodies benefit from the new growth. 

The process for establishing a TIF begins by identifying an area that meets the requirements for a "redevelopment project area" (more detail is below), drafting the required documents (an Eligibility Report, a Redevelopment Plan, and in cases where there are more than 75 occupied residential units, as is likely the case in the Study Area, a Housing Impact Study), holding a Public Information Meeting (also a requirement in this Study Area due to the number of residential units), a Joint Review Board meeting (comprised of representatives of certain taxing bodies impacted by the TIF), and a Public Hearing, prior to the adoption of three ordinances by the Village Board.  The County Clerk is then notified so that the County can establish the taxing bodies’ base value and begin to collect and distribute incremental revenues.