State Representative John Fritchey filed HB6904 with the Clerk of the Illinois House of Representatives on August 27^th, which would amend the Illinois TIF Act to limit the availability of a major portion of the real estate tax increment from being used to pay for development costs.

HB6904, which would impact all new TIF Districts and all TIF Districts amended by the Illinois General Assembly after the effective date of the amendment, would require that the portion of real estate taxes levied on property in a redevelopment project area attributable to a school district be allocated and paid to the school district as if the redevelopment project area did not exist.

School Districts typically receive the largest portion of the real estate tax distributed to the overlapping taxing bodies.  The requirement to pay the school district portions of the incremental real estate taxes to the school districts instead of the tax incremental allocation fund would result in a substantial decrease in the amount of increment available to pay redevelopment project costs, in effect, crippling the utility of TIF as a viable municipal economic incentive tool.

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