A Madison County Board member said there is growing concern about Collinsville officials' plan to create a new TIF district and to expand an existing business district.
Under the proposal, the expanded Collinsville Crossing business district would include Wal-Mart and Home Depot, allowing the city to collect an additional 1 percent sales tax from purchases at those businesses. The proposed tax increment financing district along the St. Louis Road/Collinsville Road corridor could generate additional property tax dollars that would be set aside for future development.
However, Madison County Board member Lisa Ciampoli said the plans take the cost of development away from the developer and puts the burden on individual taxpayers.
"They're looking to raise the sales tax again and I don't think that's the answer," said Ciampoli, who represents District 25. "Everything I hear from my constituents is they're fed up with high rates, high taxes and they're yelling for a break. We can't solve the problem by always taxing people."
Ciampoli, a former Collinsville City Council member, said a new TIF district will freeze property tax revenue that could go back to the taxpayer and the higher sales tax will drive people to shop outside of Collinsville.
However, Paul Mann, the city's economic development director, said there won't be any additional property tax revenue if a TIF district is not created and that once the TIF district is created, most of the additional revenue will go to infrastructure costs, such as sewers and roads, and not to developers.
"We're trying to make it attractive to developers or that area will continue to decline and lose property tax revenue," Mann said. "This way we can capture money to redevelop that area and attract new development which will increase property tax revenue."
Mann also said that he doesn't see any evidence that a higher sales tax will affect the Collinsville Crossing businesses.
"Have you seen the cars in Wal-Mart's parking lot?" he said. "There is no indication that (an increased sales tax) would make people go elsewhere. Our Home Depot is one of the better-performing Home Depots in the metro area."
Mann said the additional sales tax is needed to cover payments for the bonds the city issued for development and infrastructure cost of the strip mall. The current sales tax generated by the businesses is not enough to cover the bond payments, forcing the city to pay by borrowing from the city's general fund, according to Finance Director Tamara Ammann.
Mann said he believes that there are misconception about how TIF and business districts work and that they are needed tools to bring business revenue into the city. He said the city's TIF District 1, which includes Downtown Collinsville and the Gateway Center, has been very successful and is generating income that is used to pay off bonds that paid for infrastructure improvements.
Ciampoli said she is not against economic development, but believes TIF and business districts favor big business and developers over the average person.
"(TIFs) have their place, but they've been overused and not always for the best interest for the citizens of Collinsville. I think many times it is used for the big developer," Ciampoli said. "I thought the whole purpose of development is so residents have to pay less taxes because businesses are paying the taxes."
Contact reporter Ramona C. Sanders at 618-344-0264, ext. 136
*Information about the June 25 public hearing for the St. Louis Road business district has been edited to correct it. A hearing the St. Louis Road TIF district will be held in August.