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2010 In Review/Spring 2011

I'd like to share my thoughts with you on 2010 and a promising Spring 2011, as it relates to the success of communities using Tax Increment Financing (TIF).

2010 - What a year! What does a community do in the middle of this Great Recession? What do you do when the State of Illinois is broke and hasn't paid communities their share of tax revenues?

Well, you do exactly what many of you have done: You followed our 3 steps to a "Healthier Budget":

1. Check your past expenditures from your General Fund that had also been included in your TIF Plan and could now be reimbursed from TIF increment.

2. Look at your present budget year and next year's to see what could be paid from TIF funds instead of the General Fund.

3. If you have sufficient increment generated from your TIF District(s), explore issuing bonds at currently historically low rates to fund major public or private projects.

The 2010 Results Are In:

  • Many of you called to ask about adjusting or refunding your General Fund by obtaining reimbursements from your TIF Fund(s). In some cases a transfer of less than $100,000 was enough to balance your budget. In most cases, a review of the categories of reimbursements and the projected increment will help balance the budgets over the next several years.
  • With the Federal Government's creation of the American Recovery and Reinvestment Act (ARRA), Build American Bond (BAB), and Recovery Zone Bond (RZB) Programs for 2009 and 2010, an opportunity was afforded to municipalities and other local governments to issue special bonds with very low net interest costs for new projects that would stimulate the economy. Using only part of the current increment generated, we recommended and coordinated the issuance of $40,660,000 in BAB's and RZB's and $26,945,000 in Tax-Exempt Municipal Bonds.
  • Net interest rates for these bonds mentioned above were as low as 3.1% over 15 years and 3.76% over 20 years. If the TIF increment that has been pledged to repay these bonds grows at a modest 3% over the next 15-20 years, then all of these bonds will have essentially been issued at little or no interest cost. In addition, under the ARRA rules, the U.S. Treasury is rebating a portion of the BAB and RZB interest. The interest rebates may then be used to further improve the General Fund balances of the municipalities.

Tom Jacob Named One of America's "Leading Attorneys":

Much to my surprise, I received notice in December that I had been selected as one of America's "LEADING LAWYERS". This Association stated that members are not solicited to join but are nominated by their peers and, then, selected by a national committee for outstanding legal expertise and credentials. I have no idea which lawyer(s) suggested this honor for me but I appreciate it. I was also surprised because there is no specific category for Economic Development Specialists. However, I take pride in the fact that our clients continue to recognize the importance of what we do!

Please contact us to learn more about what economic development plan is right for your community.

Become Better Informed About TIF. Call Us today.

To learn more about Tax Increment Financing and about the experts of Jacob & Klein, Ltd. and The Economic
Development Group, Ltd., call us and ask for our complimentary “TIF 101” introductory meeting.


1701 Clearwater Avenue | Bloomington, IL 61704
ph 309.664.7777 | fax 309.664.7878

925 Shooting Park Rd., Suite A | Peru, IL 61354
ph 815-223-7550 | fax 815-223-7577

© 2018 Jacob & Klein, Ltd. and The Economic Development Group, Ltd.

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