PTELL & TIF Explained
McDonough County follows the Property Tax Extension Limitation Law (PTELL), which means in 1997, the PTELL was passed by voters in McDonough County and taxing bodies theoretically cannot raise a tax levy over the lesser of five percent or the PTELL limiting rate for that year (however, special circumstances allow for the rate to go over five percent).
According to Macomb City Township Supervisor Angela Markley, the PTELL amount over the past two years has remained around five percent, which, she said is the highest she’s seen over the years. Before the increases, the PTELL amount stayed around three percent. If the population increases, the township should no longer have to levy the full amount.
In addition, as the City of Macomb is part of an enterprise zone and TIF (tax increment financing district), Businesses and industries within the enterprise zone receive a 10-year tax abatement (aka a “tax break”), while the City of Macomb collects TIF dollars to provide incentives to businesses and industries looking to build/relocate to Macomb. The TIF incentive does not raise taxes.
County Clerk Jeremy Benson explained the East Side TIF is a district created in 2022 for economic development, and while it does not levy for any taxes, all of the taxing bodies that are affected by the TIF district, agreed that their respective property assessed value was essentially fixed/capped at the value in 2022. These taxing bodies will receive taxes based on that fixed/capped assessed value. Any taxes on the increase in the assessed values after that date are then directed to the TIF district instead of the taxing bodies.
Benson uses the following explanation when individuals inquire about a TIF District: If you have a property in the TIF district and the assessed value at the time the district was created is $10,000, the taxing bodies are all getting their portion of the taxes paid on that amount. The next year, if the assessed value is $10,500, the taxing bodies still get the taxes on the original $10,000, but the taxes on the additional $500 of assessed value now go to the TIF district instead of the taxing bodies. The property owner’s tax bill would be the same whether there is a TIF district or not (taxes on assessed value of $10,500) but where those tax dollars go changes by the creation of the TIF district.) With the East Side TIFF being a newer district, the assessment changes in the last two years have made this stand out more on the individual tax bills because that number is growing more than the other individual taxing bodies.
