Editorial: Sugar Grove rightly goes back to square one

By on September 16, 2011

The village of Sugar Grove announced in early September that it intended to end its pursuit of the proposed Tax Increment Financing (TIF) District that had turned into a point of contention among various taxing bodies in the area.

The plan, as proposed, would have spanned 1,800 acres and focused on increasing the amount of industrial development in the village.

Basically, a TIF District is a tool designed to spur development by creating a boundary around areas of land, freezing that land’s current tax revenue in place, and then using any further increase in tax revenue to spur development within the TIF District boundary.

In theory, this can be an effective tool to spur development in an area that is struggling to grow. And right now, with the economy being what it is, just about everywhere is struggling. However, the potential downside is that the taxing bodies that may need additional revenue will not be able to obtain the tax-revenue growth until the life of the TIF District ends. For some taxing bodies, this may not cause a negative impact.

For example, a library district would not be negatively impacted by a TIF District because the type of growth would not add library patrons. So, the library would serve the same number of residents regardless of the scope or life of the TIF District. For a fire protection district, however, it is a much different story. That fire protection district would need to provide additional resources to provide protection to the new growth, leading to more cost. However, it would be prevented from obtaining the increase in tax revenue necessary to offset that increase in cost.

Therefore, there are potential positives and negatives to using this type of economic tool. That is why the details of the district and the communication among the various impacted parties is so important. That is also why the Sugar Grove TIF District, as proposed, caused so much concern.

The scale of the proposed district was 1,800 acres, and the life of the district was 23 years. For some area taxing bodies, that was just too much land for too long of a time.

We are glad to see Sugar Grove officials take a step back and decide to pull the plan as proposed. That doesn’t mean a TIF District—as a concept—will not be pursued. Rather, it means that if the village decides to pursue a TIF District, it will be a new proposal with a process that will begin from square one.

We believe Sugar Grove officials deserve a pat on the back for not pushing through the TIF District as proposed. When a recent public hearing was held, the response was so large that the meeting had to be moved to accommodate all of the people in attendance. The response was also so overwhelmingly negative that the back and forth became contentious at times.

Clearly, the broader community and the other taxing bodies held significant concerns with the plan as proposed, and the village did the right thing by taking those opinions into account.

As Elburn Herald reporter Keith Beebe reported in the Sept. 8 edition, Village Administrator Brent Eichelberger said “I think that history has shown that the boards that have been (in Sugar Grove) look out for the greater community, not just the village. We want to do what’s right for the community as a whole. If a TIF is put in place, I think it’s a good tool to have.”

A TIF District might be what the area needs to spur economic development in a very difficult time. If the village feels that it is the right tool to use at the right time, then we feel Eichelberger’s approach is the right one.