A recent social media post alerted Monee residents about what appeared to be hefty tax levy increases for the fire department, township and road district.
The post noted that the Monee Fire Protection District Board of Trustees was hiking its levy by 10 percent, while the township board and its road district each planned 7.5 percent increases.
Although those numbers were correct, they did not include information about the Tax Increment Financing (TIF) district involved and the impact that will have on the actual tax rate.
The post caused consternation among residents who feared exorbitant property tax bills were on the horizon.
“The 10 percent increase is not a rate increase that homeowners will see,” MFPD Chief Carl Nieland explained.
“The 10 percent levy increase is due to the Village of Monee closing out a 23-year TIF. The TIF will provide a new Equalized Assessed Valuation of about $27 million, which taxing bodies get only one chance to include in the levy.
“The district has raised the levy only by the Consumer Price Index every year. Since we will not raise the tax rate, the only reason a taxpayer would see an increase is if the assessed value went up on their house.”
Meanwhile, Nieland said the cost of providing emergency services continues to rise. The district will use the additional funds for capital purchases, equipment replacement programs and wages.
“A fire engine cost $745,000 in 2021,” he said. “We ordered an identical new fire engine in 2023 for delivery in 2026. The cost: $1.1 million. An ambulance cot system costs approximately $70,000.”
Nieland emphasized that the tax rate for the Monee FPD has decreased every year.
“In 2020, we had a rate of 0.88,” he said. “In 2024, the rate is 0.75. The rate will not go up this year, either.”
He added a TIF explanation: “Property EAV freezes to the taxing bodies when a TIF is created. When it goes in as farmland at $500 for 100 acres, then a large development is built on that 100 acres, the fire district still receives only the $500 in taxes — even though it may now have a multimillion-dollar EAV. This stays this way for the life of the TIF: 23 years.”
In Monee Township, Supervisor Donna Dettbarn said the rate increases would add only $19 to the taxes on a house with a fair market value of $200,000 and $14 to a tax bill for a $150,000 house.
“That includes both the township and road district,” she added.
“We are raising the levy only because Monee TIF 3 is closing after being off the tax rolls for 23 years. It is considered new property, and the township must levy the EAV to get it back on the tax rolls, or we lose those tax dollars forever. You can collect this only in the year it was dissolved.”
The levy, taxes and TIF are complicated and can take time — and explanation — to grasp.
Closing a TIF District and the sequence of events that follow create a ripple effect on other taxing bodies. The process is complex.
What a TIF Closeout Means
According to village sources, when the village closes out a 23-year TIF District, the TIF has reached its statutory expiration limit. In Illinois, TIFs typically have a 23-year lifespan, although they can sometimes be extended.
TIF Mechanism: For 23 years, the village collected the increase in property taxes (the “tax increment”) generated by new development or rising values within the TIF area and used it exclusively for TIF-related projects such as infrastructure and tax incentives for potential developments within that district. Other taxing bodies — the Fire District, Township, School District, Library — received taxes based only on the property value before the TIF was established (the “frozen base value”).
The Closeout: When the TIF officially closes, all properties within that district return to the regular property tax roll. Other taxing bodies can now collect property taxes on the current, full and much higher Equalized Assessed Value of those properties, rather than just the old, frozen base EAV.
Here is the key to understanding the reported “rate increases” by the Fire District and Township/Road District:
Increased EAV/Tax Base: The EAV of the entire tax base for these districts increases suddenly and significantly because the TIF properties are now included at their current market value.
Required Levy Adjustment: To receive the additional property tax revenue generated by this EAV increase, the taxing body must include the new EAV in its annual levy request. Without this step, they would leave money uncollected.
The Appearance of an Increase: The districts aim to collect the same or slightly higher dollar amount, but because their tax base has grown substantially, their tax rate might change.
Money barely pays any property taxes as it is for the same size homes compared to nearby towns like Frankfort.