Economic Development - FAQs

What are the major advantages of a Skokie business location?

Skokie has always been a pro-business community. Past surveys have shown that a very high percentage of businesses are satisfied with their Skokie location. Major advantages include:

• A suburban location close to Chicago and O'Hare Airport with direct interstate highway access and various modes of public transit. Skokie is conveniently located to and accessed by local labor markets.
• A fully developed, mature community with excellent public utilities and municipals services. Skokie's ISO Class 1 rated Fire Department and nationally accredited Police, Fire and Public Works Departments make it the only municipality in the country to combine such highly rated services.
• Reasonable taxes and more importantly no hidden costs of doing business. Skokie does not have, nor does it plan to initiate any utility taxes, head taxes, impact fees, special business licenses, or special assessments. All schools, roads, municipal buildings and accompanying services are in place, decreasing the possibility of any major tax hikes.  The Village of  Skokie has not increased its property tax levy since 1991, and actually decreased the levy in most years.
• "One stop shopping" with respect to approval of development plans, permits, technical assistance and licenses. The Village's Community Development Department stands ready to assist business, not impede it.

What can the Village do to reduce the business property tax burden?

Cook County has a complex method of property taxation. For several decades, the County has used a disparate system of property assessment with significantly higher rates for business concerns than for residents. Additionally, the State of Illinois issues a multiplier to be applied against the assessed valuation to "equalize" it with assessment practices throughout the State relative to its percentage of fair market value. An "equalized assessed valuation", or EAV, is arrived at by the County and the State before local tax rates are applied.

The Village of Skokie, elementary school district, high school district, Cook County, Skokie Park District (a separate governmental entity), Oakton Community College, Niles Township, and several other smaller taxing districts apply local tax rates. The Village of Skokie's tax rate only constitutes 7.70% of an average property tax bill. This percentage has been steadily dropping for many years, as the Village has been able to stabilize operational and service costs while increasingly seeking alternative means of revenue generation. Sales tax revenue is the single largest revenue source for the Village's General Fund. In fact, the Village has maintained or even reduced its property tax levy for every year since 1991 without any reduction in services. While the Village cannot affect most of a property tax bill, it has certainly reduced its own dependence on this source of revenue.

What is a TIF district and why are they so popular for redevelopment purposes?

Tax increment financing (TIF) is a State legislated development tool exclusively for municipalities. Under TIF, an eligible "blighted" or "conservation" (deteriorating) district is formed and an initial EAV of the area is determined. All of the affected taxing districts continue to receive tax revenue based on the initial EAV throughout the life of the TIF. As redevelopment occurs and the area's EAV increases, taxes on the increased portion are diverted to a special fund to pay for public costs associated with the redevelopment effort. This is the "tax increment". Eligible expenditures are discussed under the Programs button of this Economic Development web site.

TIF does not affect an individual property owner's tax bill; it does not constitute a tax increase or decrease. Tax revenue is merely distributed differently with the incremental portion being deposited to the special fund. The municipality is able to borrow against the incremental revenue flow by issuing bonds or paying for redevelopment costs from other sources of funds.

TIFs are popular for redevelopment purposes because they operate under the premise that redevelopment should pay for itself. There are very few tools available to municipalities to facilitate redevelopment. TIF allows a community to take on some of the extraordinary costs associated with redevelopment and have an equitable source of revenue to pay for those costs. In essence, all of the taxing districts invest in a TIF district, and all benefit from the redevelopment at a future date.