Housing incentive program hits a snag

RANTOUL — The village’s plan to implement a tax incentive program to spur housing construction in the community has hit a snag if school districts are to participate.

Economic Development Director Rebecca Motley told the village board last week that if either Rantoul City Schools or Rantoul Township High School districts want to participate, they will have to be part of an enterprise zone.

The housing incentives proposal would refund property taxes on new home construction or improvements or renovations to existing homes for the first five years.

The portion of taxes paid to participating taxing bodies would be refunded in full for the first three years, at 66 percent the fourth year and 33 percent the fifth year.

The Rantoul City Schools board has opted to join with the village in the incentive plan. The RTHS board, however, which also encompasses other communities besides Rantoul, opted to wait.

The village could continue as the sole taxing district offering potential home builders a tax incentive, but it would be only a fraction of the savings were the school districts to participate. The village’s portion takes up 12-14 percent of the local tax bill.

Motley estimated it would cost the village $30,000 to secure an enterprise zone. That includes the fee for a consultant as well as the cost to secure state approval and for engineering costs.

“It is an expense, but I would encourage you to look at it as an investment,” Motley told the village board. “We’ve had a lot of interest in this housing incentive. I think if we were able to offer this ... we could really sell it and try to get some new homes built.”

She said the process would take six months to a year.

Board trustee Jennifer Fox is not sold on the wisdom of spending $30,000 for an enterprise zone.

“Thirty-thousand dollars is a lot of money to put forth versus (the possible benefits),” Fox said. “If we do go ahead and do the enterprise zone, is that something the schools can take advantage of? Why don’t we just spend that money to give our own tax rebate like we were going to anyway?”

Motley said the village could do that, but it wouldn’t be nearly as enticing if there is school district participation.

Village attorney Ken Beth said he thinks the village can get the enterprise zone status done for a lesser amount — maybe $20,000.

Beth said there are also other homeowner benefits to an enterprise zone. One is that the homeowner building a new dwelling doesn’t have to pay sales tax on any building materials that go into the construction — an amount that can be as high as 9 percent.

Said trustee Terry Workman, “The problem is we have a limited amount of abatement (that can be offered) because the village’s amount isn’t that high. If the schools could participate it would be more, plus the sales tax.”

Village Administrator Jeff Fiegenschuh cautioned the board that if it does opt for an enterprise zone that it get at least a part-time employee to administer it “besides Rebecca because it is very time-consuming. It is quite a bit of paper work.”



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