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Thursday, March 18, 2004 10:54 am

TIF rift

When Alderman Frank Kunz first floated his idea to put an end to special incentives for downtown developers, he thought it would go over like a lead balloon. After all, the Central Area Tax Increment Financing program, better known as "the downtown TIF," has been responsible for the extreme makeover that has revitalized the area around the Old State Capitol.

But lately, Kunz's idea has been gathering some momentum, thanks to favorable hearings in front of two influential groups -- the Central City Neighborhood Association, and the District 186 School Board.

On March 8, the CCNA voted to send aldermen a letter announcing its support of Kunz's proposal. And on March 15, the school board added the issue to its April 5 agenda. Board member Pat Grady, who raised the topic, said she expects the board will take a vote expressing its opinion on whether to dismantle the TIF.

A TIF diverts property taxes that would normally go to taxing entities -- the school district, park district, county and others -- and puts it in a special fund used to finance rehabilitation and infrastructure projects.

When it was passed in 1981, the TIF was set to expire after 23 years, in December 2004. However, in 1999, the City Council amended the ordinance to extend the TIF an additional 12 years, through 2016. Kunz's proposal would basically undo the extension approved in 1999.

Grady already knows she will vote to dismantle the TIF, saying the school district relies on property taxes to address critical needs that were unforeseen when the TIF was extended in 1999 -- concerns such as hiring campus security officers, bringing teachers up to the "highly qualified" level, and meeting the requirements of the No Child Left Behind act.

"If they haven't done what they need to do in 23 years, then too bad," she says.

The CCNA also cited concerns for the school district in its letter asking aldermen to dismantle the downtown TIF.

"Increasing the quality of education benefits taxpayers throughout our city, and will pay dividends when students, served by a better educational system, return to serve our city," the letter states.

Susan Mogerman, director of Downtown Springfield Inc., hopes the TIF will survive Kunz's challenge. None of the improvements seen downtown would have happened without the TIF incentive, she says.

"These buildings are expensive and difficult to do," she says. "You can't walk into a bank and take out a loan without some other incentives at hand, because there isn't enough anticipated income to make the cash flow appropriate for a bank to give you a loan."

Kunz, though, calls the TIF program "tax money which should go for the many being wasted on the few."

Furthermore, he says the downtown TIF, in particular, fails to accomplish the chief purpose of a TIF, namely to raise property taxes. Major beneficiaries of the downtown TIF fund include enterprises that don't pay property taxes, such as the city skating rink ($180,000), the Springfield Performing Arts Center ($250,000), and the Abraham Lincoln Presidential Library and Museum ($9 million).

Despite the shows of support, Kunz still isn't optimistic.

"I still assume I will lose," he says. "But that's never stopped me before and it's not going to stop me now.

"As an alderman, I try to bring up things I see that are wrong," Kunz says. "If the people of Springfield want to sit on their dead asses and not do anything, it's fine by me. I'm not going to kill myself over it."

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