Wenona's TIF district is unfair to Fieldcrest

Based on information from the Marshall County Treasurer, Wenona's TIF district cost the Fieldcrest school district $187,089.57 in lost revenue in 2001 alone. To be fair, it must also be revealed that Minonk's combined TIF districts cost the school district $59,510.20 in 2001. This is lost tax dollars to just the school district. The total dollars lost to all tax districts as a result of the Wenona TIF district is $340,162.86 for 2001 and Minonk's two TIF districts resulted in the loss of $107,430.24 for all tax districts in 2001. This means that fire districts, library districts, etc. also are losing revenue because of the TIF districts.

The reason I am singling out Wenona is because of the unfairness of its TIF district. TIF districts were designed to help municipalities develop blighted and rundown areas in order to make them more valuable and eventually to increase the value of the land and thus the property tax dollars eminating from the TIF area. Minonk created two TIF districts, one at the Caroline Development and one for the downtown business districts. Both of these areas comply with the spirit and intent of TIF districts. The Caroline Development was farmland that was converted into commercial and industrial land. Downtown Minonk has many rundown buildings that are in need of restoration and repair. The TIF district will hopefully encourage redevelopment of downtown Minonk.

Wenona, on the other hand, made a mockery out of the TIF district intent by putting the entire city in its TIF district. This explains why so many more tax dollars are lost due to Wenona's TIF district as compared to Minonk's. Everyone knows that the residential area of Wenona is not a blighted area and does not qualify to be in a TIF district. Residential areas were not intended to be included in TIF districts. Unfortunately, the TIF district guidelines are not enforced and basically each city can do what they want as far as a TIF district is concerned.

TIF, or tax increment financing districts, are a mystery to most people. They usually are set up to be in effect for a maximum of 23 years. Each piece of property in a TIF district has its property tax amount frozen at that value in the year in which the TIF is established. In each year thereafter for the life of the TIF, the increase in property taxes as the result of the increase in valuation does not go the normal taxing bodies such as the school district, but instead it goes toward the TIF district.

For example, a piece of property tax may have a taxable value (EVA) of $20,000 and have property taxes of $1000 in the first year of the TIF. In the next year, the taxable value may go up to $22,000 and the property taxes may go up to $1100, an increase of $100. This additional $100 does not go to any taxing body but goes instead to the TIF district. This goes on for 23 years.

The numbers from a sample Wenona property tax bill illustrates how much Wenona's TIF district is hurting the Fieldcrest taxpayers . This person's tax bill indicated that $408.77 went to the Fieldcrest school district while $938.88 went to the Wenona TIF district. In other words, twice as much went to the Wenona TIF as went to the school district. This person's taxes increased by $133.78 in 2001 and all of it was was applied to the TIF district. Wenona established their TIF district in 1994. This means that this person's property tax has increased by $938.88 since 1994 and all of that increase went towards the Wenona TIF district. All taxing districts including the school district are still receiving the same amount of money from this person's tax bill as it received in 1994!

Most muncipalities will have an intergovernmental agreement with the school district to regulate the amount of tax dollars lost to the school. Minonk has an agreement on TIF # 2 with Fieldcrest which stipulates that the school will receive 25% of all tax dollars that exceed $50,000 starting five years after the TIF district has been established. Minonk has no agreement with the school regarding TIF district #1 but City Administrator Trent Smith said that the city has agreed to negotiate possible future agreements with the school if the school becomes severely impacted by the TIF district.

Wenona has signed an intergovernmental agreement with Fieldcrest in 1998 in which they will help pay on a bond that Fieldcrest issued in 1997. The amount received, however, is only about $3000 per year according to Fieldcrest Superintendent Michael Stagliano, a mere pittance compared to the $340,000 that goes into Wenona's TIF district each year.

With the financial problems facing the Fieldcrest school district, it is highly irresponsible for the City of Wenona to deprive the school of much needed tax dollars with a totally unfair TIF district. The way it stands now, the school district tax dollars from Wenona taxpayers will remain relatively fixed until 2017. That is a burden that should not be borne by the rest of the taxpayers in the school districts. Since $187,089 was lost in 2001 alone and Wenona's TIF district has another 14 years to go, it can be concluded that at least $2,630,460 will be lost to Fieldcrest in the next 14 years.

The cities of Toluca, Rutland and Dana have no TIF district and the claim can be made that they are subsidizing the cities of Minonk and Wenona in the Fieldcrest school district. It also should be mentioned that the citizens of Wenona are not guilty of gouging the school district. They pay their fair share of taxes. The guilty party is the officials of Wenona who developed this unfair TIF district and are developing the city's expansion at the expense of educating our children at Fieldcrest. It is ironic that while Wenona is not contributing its fair share of taxes to the Fieldcrest school district, the most expensive improvement last year was a $250,000 elevator installed at Wenona's middle school.

It is no secret that there are still rumblings among Minonk residents about the Fieldcrest school consolidation. Many Minonk residents feel that they are worse off financially since the consolidation. Solidarity within the communities that comprise the Fieldcrest school district will not be achieved until Wenona signs an agreement with the Fieldcrest school district that puts a cap on the tax dollars that go into their TIF district. Wenona's TIF district should be limited to its development south of the city and to its downtown area.

The Fieldcrest administration and school board has been aware of Wenona's unfair TIF district since its inception. Fieldcrest's Board of Education president Joe Knapp has indicated that he has approached Wenona on the possibility of signing an intergovernmental agreement with little success. It is time to take action. If the City of Wenona refuses to sign an agreement, Fieldcrest should proceed with legal action to force an agreement that results in a fair distribution of taxes to Fieldcrest from all communities within the district.