By John Byrne, Post-Tribune staff writer
CROWN POINT -- Tax Increment Financing districts are eating up an increasing amount of Lake County's precious property tax revenue, and in the process are driving up taxes for people who don't live within their boundaries, the county's finance director warned Tuesday.
Lake County finance director Dante Rondelli told members of the county council that local legislators are failing to take a long term view of the costs and benefits of tax increment financing districts when approving them.
"Is the economic benefit such that it makes it worth it for the rest of the population to bear that extra tax burden during the life of the TIF?" Rondelli asked as the council approved expanding the county's TIF district in Hobart.
TIFs, increasingly popular development tools, freeze property taxes generated for public entities like schools from within set geographic boundaries.
As the value of property increases thanks to new businesses opening within the TIF district, any new tax revenue generated stays within the district to pay off bond debt or finance new projects therein.
The Lake County TIF alone produced more than $1.9 million in property tax revenue last year that was kept within the district, according to county records.
Some of that money was used to fund the sewer and water project the council voted Tuesday to include within the district.
The work runs sewer and water from the main body of the TIF district, near Grand Boulevard and U.S. 30 in Hobart, to John Wood Elementary School, 6100 E. 73rd Ave.
The $1.5 million sewer project was completed in 2006, and was paid for using TIF funds, Bilski said.
Rondelli argued the money could have been used to speed reduction of the bond debt, so the taxes produced within the district could more quickly return to the general tax pool and reduce property taxes for other residents and businesses.
The Lake County TIF, one of dozens in the county, is set to expire in 2015.
"It's the council's decision," Rondelli said. "I simply needed to make them aware that TIF districts, artificially low property assessments and other kinds of abatements comprise a surprisingly large amount of the factors that drive up taxes around the county."