Recently, the Illinois Supreme Court decided not to hear an appeal on an Appellate Court ruling which upheld the TIF process in the City of Belleville.  The case involved the City’s creation of a TIF district and a pledge of incremental property taxes and sales taxes to pay for certain costs related to the development of a retail center.

In January 2006, the City adopted ordinances to create a TIF District and to impose a Business District sales tax.  The City also approved a redevelopment agreement under which incremental property taxes, Business District taxes and local sales taxes were pledged to fund certain costs associated with a retail project.

In February 2006, a Belleville resident filed a complaint with the Circuit Court, challenging the City’s decision to establish a TIF District and to pledge incremental property taxes and sales taxes for the following reasons:

• The establishment of the TIF district, the imposition of a Business District sales tax and the resulting tax increment financing violated the TIF Act and the Business District Act because agricultural land included in the TIF District and Business District does not qualify as blighted under both laws; and
• The area would have developed in the absence of Business District or TIF assistance.

In September 2009, the Circuit Court found that sufficient blighting factors as stated in the TIF Act were present to a meaningful extent in the TIF District, therefore validating the establishment of the TIF District.  The Circuit Court also found that the City did not violate the Business District Act because blight conditions such as failing intersection structures and illegal dumping were present in the area included within the Business District.  Further, the Circuit Court concluded that the area would not have reasonably been anticipated to develop without Business Distritct or TIF assistance.

Subsequently, the plaintiff filed an appeal with the Illinois 5th District Appellate Court.  On February 2011, the Appellate Court ruled to uphold the Circuit Court’s decision.  In March 2011, the plaintiff appealed to the Illinois Supreme Court; however, the Supreme Court elected not to hear this case in a statement issued on May 25, 2011.