*Editor’s Note: TIF districts are difficult to understand, but something the Mahomet Daily writers have approached over recent years. In 2020, the Top 10 Things You Need to Know About TIF Districts was published. Looking back at that article might be helpful in understanding how TIF districts function.

Diversifying the tax base in the Village of Mahomet has been a significant topic of discussion during the last decade.

School board candidates have run on the platform; Village plans show areas of targeted commercial or industrial development; email discussions highlight plans to bring more commercial buildings into the area.

The idea is that over time, with commercial growth, the residential taxpayer’s burden towards the school district and the Village of Mahomet will be lessened.

Alongside a significant residential boom, Mahomet-Seymour constituents have also noticed a transformation in restaurant, service, and retail options in the town of 9,400 residents within recent years. It’s not that Mahomet has been desolate in dining, shopping, and service options in the last two decades, but over the last five years, Sangamon Elementary was purchased to house office and retail space; 1000 Churchill along IL-150 has filled, with more development to come and in downtown Mahomet, a place historically known for antiques, storefronts are consistently occupied.

Perhaps one day a hotel, a truck stop, or event center will be located on the east side of town. Yet the placement of those entities or any other business development that lands within the TIF districts of Mahomet, will not help residential taxpayers with the burden of funding public entities, like the school district for the next 15-21 years.

In 2000, the Village of Mahomet entered into an agreement with other taxing bodies to establish a TIF district on the east side of its limits. TIF districts create a section within a municipality’s limits to target growth.

A TIF District is a designated area a municipality wants to target for redevelopment. Once a TIF district is designated and approved, the base EAV (equalized assessed value) of a property is established. That established tax value amount is frozen at that time and continues to flow to all taxing bodies as they normally would.

Then, a second fund for that same land/area, a TIF fund, is established. Funds for the TIF fund are added based on any increases in property values to those areas, whether through inflation, tax levy increases or because of development in the area. This TIF stream does not go to the taxing bodies, schools, library, and fire, but instead is kept separate and is allocated to the Village to pay for redevelopment.

The East Mahomet TIF fund was unique, though, in that 100 percent of the residential increment continued to pass through to all taxing bodies, including Mahomet-Seymour School District, while 50 percent of the commercial/ag increment was kept in the TIF fund. Village Administrator Patrick Brown said that with the addition of Middletown Place Apartments, that money (from the Apartment increases in value) should go into the TIF increment, but as a result of the special TIF agreement,  is passed through to the school district.

The Village of Mahomet used some of this increment to fund projects like expanding IL-150 at Prairieview Road and installing fiber optic lines from I-74 to Churchill Road with hopes to spur commercial development. When those improvements were made, industrial development was on the horizon. As that fell through, the TIF district didn’t see real commercial interest until recently when Middletown Prairie Elementary Phase I and Phase II were complete.

TIF funds are supposed to be authorized for 23 years. The hope is that after nearly a quarter of a century of public infrastructure investment, the TIF area will have seen significant improvements, enough to make it economically viable.

The East Mahomet TIF should have been dissolved by calendar year 2024. But in 2019, the Village of Mahomet asked all taxing authorities to extend the TIF district for another 12 years, leaving it to end in 2036. With that extension, the Village promised to use the TIF funds to extend South Mahomet Road all the way to Prairieview Rd. by phase II. This investment into the TIF district is thought to encourage additional commercial and residential growth in the area.

In that same year, the Village of Mahomet asked other taxing bodies, including the Mahomet-Seymour School District, to approve a Downtown “Commerical Core” TIF. Unlike before, 100 percent of residential and commercial property tax increments will go into the TIF fund until 2042.

Essentially, these decisions have placed 50.8 percent of current commercial property tax dollars within TIF districts and out of reach of taxing bodies other than the Village. As the Village plans to work on the historic downtown area, with its eyes set on townhomes and multi-use buildings, and also pull commercial development further east down IL-150 to Prairieview Road, the Mahomet-Seymour School District (along with other taxing bodies) will only see limited benefits. In the Downtown TIF area, none of the benefit from commercial growth dollars will funnel to the school district until the $97.9 million referendum is paid off, should it pass

It’s true that no matter what taxpayers decide on June 28, the TIF districts will continue to operate in this way until they are dissolved. At that time, the Village can also choose other areas for development through TIF districts.

Local officials have said the benefit of the TIF district is substantial. They believe that without the TIF infrastructure in a “blighted” area, development would not have happened.

For months, the Mahomet Daily has sought to understand exactly how the East Mahomet TIF has grown. When asked for documentation without FOIA, the Village, Champaign County Treasurer’s office and the Champaign County Clerk’s office have not provided information on how the TIF has grown each year or how the pass-through is distributed. Because of FOIA, the Village of Mahomet says they will provide the information, but using an extension clause provided through FOIA, that information will not be available until June 23, 2022.

The Illinois Comptroller’s website has TIF documentation provided by the Village from 2000-2021. While that shows the pass-through amounts and expenditure information, it does not show the net taxable value each year or the TIF extension or increment amounts. The Clerk’s website has a trove of property tax extension information for 2021, though. In this, the net taxable value, the TIF extension, and the increment amounts can be seen for that year. The Clerk’s office should provide more information this week, so more information about the growth of the TIF will be available soon.

Using data from the Champaign County Clerk’s property tax extension documents, from 2018-2021 commercial property value in the East Mahomet TIF has increased by an average of 16 percent each year.  No one can know exactly how the values will increase or decrease in the future, but should the values increase in the same way that they have over the past four years (a 16% per year growth of commercial within the TIF) then, in addition to the losses during the 23-year initial TIF, during the 13-year period of the TIF extension, the Mahomet-Seymour School District would miss out on approximately $14,838,489 more in tax revenue because that amount will be diverted to the TIF. If there were to be more growth in this area due to school growth, that number would be higher.

Should the referendum pass on June 28, commercial property taxpayers will see the same increase that residential taxpayers will see. But the school district will not receive 50 percent of those dollars in the East Mahomet TIF. They will not receive 100 percent of those dollars from the downtown TIF, either. The district will get all of the residential tax dollars in the East Mahomet TIF, but just as they have for the last 20 years, they will receive only 50 percent of the increment over the established assessed value in 2000.

The picture looks a little different in the Downtown TIF area. As the Mahomet-Seymour School Board discussed extending the East Mahomet TIF in 2019, board member Colleen Schultz noted that with the Downtown TIF and the East Mahomet TIF, the school district was missing out on money that could help the district. At that time, she (and others) voted against the extension of the TIF, noting that in 2024 the school district could reap some of the benefits of the TIF growth should the extension be voted down.

During that discussion, other board members, such as Merle Giles, indicated that they did not know that the school district had entered into a Downtown TIF agreement. That decision was okayed by then Chief Financial Business Officer Trent Nuxoll in conjunction with Superintendent Lindsey Hall. Board President Max McComb also stated he knew about the decision.

One key point that Schultz made was that commercial growth, like having Jimmy Johns (JJ) come to Mahomet, was a great asset for the village. But having the property within the TIF district would harm the school district.

The property that JJ now sits on was assessed at $157,050, and $141,450 of that was value that increased over the base assessment of that property from the beginning of the TIF. At 2021 tax rates, owners of a property assessed at $157,050 would be required to pay $12,652.12 in property taxes. Because approximately 57.4 cents of every tax dollar collected at 2021 rates go to the School District, the District should have collected approximately $7,264.20 of these tax dollars. However, because there is a TIF, $11,395.36 (90.1% of the property’s tax bill) of the taxes collected went into the TIF fund in 2021 as the TIF receives all of the tax dollars collected on the increased value over the base (the increment).  The result is that the school will only receive $721.56 of the collected tax dollars with the remaining $6,542.64 going to the TIF.

The same holds true for Sangamon on Main. Having just come off it’s exemption for the public body, all of the assessed value becomes part of the TIF increment. In this case, in 2021, the school district lost $21,066.40 in tax dollars from these property taxes because they were diverted to the TIF.

As the downtown area, including the Eastwood area, increases in value, as property tax rates fluctuate, and as inflation increases for the next 20 years, the Mahomet-Seymour School District will not see any of the increased property taxes collected into the TIF fund.

It could be said that after TIF districts witness their growth, and as Mahomet-Seymour looks at facility plans again in 20 years, commercial tax dollars will ease some of the burden for residential taxpayers in that moment. It could also be said that growth, both residential and commercial, would have and will happen naturally in Mahomet without TIF districts and that the TIF only takes money away from the schools to subsidize development.

The Mahomet Daily is still waiting to add perspective on growth in the TIF districts. That information should be available this week as we receive documents from the county.

At this time, though, we know this: over $350,000 dollars were diverted from the school district to the TIF for 2021. The detailed breakdowns from the information provided thus far are below.

(The County and the Village have provided numbers that are slightly different and so we list both.)

East Mahomet TIF, Commercial Properties (2021)

Village provided values County provided values
Net Commercial Value $13,561,521.00 $13,002.690.00
TIF Increment Value -not provided $12,961,923.00
Taxes Collected into TIF(extension amount) $1,092,542.22 $1,044,225.66
Money Diverted Away from School District $313,640.892 $299,770.44

Downtown TIF, Commercial and Residential Properties (2021)

Village provided values County provided values
Net Commercial Value $8,950,714.00 $8,929,814.00
TIF Increment Value $1,202,088.00 $1,202,088.00
Taxes Collected into TIF(extension amount) $98,843.10 $96,841.96
Money Diverted Away from School District $56,750.65 $55,601.69