What Rich Miller described last year as the "worst bill ever" is back from the grave. In the fall, Gov. Pat Quinn vetoed SB 1909,
which would have established a sales tax revenue (STAR) district in
Glen Carbon, where developers from the University Town Center group are
planning to build a $1.5 billion entertainment center. Sen. James
Clayborne (D-East St. Louis) and Rep. Tom Holbrook (D-Belleville) have
introduced a new measure this year (SB 2093) reviving the project.
If you follow the debate over tax increment financing, this should look familiar. If a STAR bond district is approved by the
General Assembly, developers capture all of the state sales tax proceeds
generated by businesses in that district. They can then take that
money, bond it, and use the cash flow to build out their project.
Taxpayers across Illinois, unfortunately, lose out. A new study
by the St. Louis-based Peckham Guyton Albers & Viets Inc. estimates
that the state will lose $729 million in sales tax revenue over 20
years if the project is paid for using STAR bonds. Decreased retail
spending in other parts of the region would also starve metro-east
communities of some $400 million in retail sales annually.
To get caught up on the debate, read Miller's post from last year, which explains in depth how local lawmakers across Illinois could use (and abuse) this model.