For the third straight year, the Village of Palatine will be giving out some of the surplus from Tax Increment Finance districts, which divert property taxes for economic development.
The Village Council unanimously approved giving out $3.6 million in TIF surplus to other taxing bodies, including both school districts, the township and the park district. The village has handed out about $9 million in the past three years, according to the village. Palatine enacted its first TIF district in 1995.
?This is all money above and beyond what would have been there,? said Council member Scott Lamerand.
Nobody was cheated out of anything, he added. The taxes were just held while the development was taking place.
Since schools collect the majority of property taxes, districts 15 and 211 will receive 63 percent of the surplus.
TIF districts freeze property tax revenue when passed. The property tax bills for residents and business owners still rise, but all additional revenue is diverted to a special fund that can be used for grants to retain or attract business, infrastructure and beautification projects, or other expenditures intended to boost economic development. Village officials are considering a fourth TIF district on Rand Road, which could come by the end of summer.
TIF districts can be controversial at times, because the property tax is diverted away from other taxing bodies, mostly schools. For example, Oak Park and River Forest High School sued the Village of Oak Park in early 2010, alleging the school district was owed $3.3 million. The lawsuit, which lasted almost two years, was settled in December.
Village officials said the TIF surplus is due to the districts being eight years ahead of schedule in revenue.
?It?s a really an example of our economic development success,? said Village Manager Reid Ottesen.
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