CCFB News» May 2022

Special Service Areas (SSAs) have been around since the 1970s, but awareness of them is not well established. In fact, the use of SSAs might be a new concept to most people. The 1870 Illinois Constitution mandated uniform taxation, thus prohibiting counties and municipalities from levying a tax to a limited geographic area for public improvements or services. However, in 1970, the Illinois Constitutional Convention altered the constitution to grant municipalities and counties this authority.
 

SSAs are characterized as a contiguous area within a municipality or county in which special governmental services and/or physical improvements are funded. Those services are in addition to services that would otherwise be provided by the general-purpose unit of government and are confined to and financed by only the area receiving the benefit.

An SSA is created under the existing county or municipal government. The benefit of creating and administering the SSA under an existing unit of government is it reduces the need to create a new special-purpose unit of government, with its own taxing authority, to provide that service. It also
allows counties and municipalities to perform services or improvements without incurring debt or levying a tax within an entire jurisdiction.

Each year, Illinois is populated with new units of government, and most of them are special-purpose districts. The primary reason for that is because the need to provide new services often puts financial pressure on existing units of government. Typically, the existing units of government are already taxing at their maximum rate, leaving little opportunity to generate revenue to fund a new service. By establishing a new special-purpose unit of government to perform the service(s), a new government body with its own taxing authority, personnel, facilities, etc. is created.

What if that same service could be provided without creating a new unit of government? Let’s use the installation of a sanitary sewer as an example. This type of costly project can benefit a targeted group of property owners who have a common interest in the improvement.
 

Other examples of activities and services provided by an SSA include

• Sidewalk improvements
• Storm sewers
• Improving trash removal
• Special event services and decorations
• Street improvements

In addition to helping control the number of newly created units of government, the formation of an SSA has benefits for property owners, including

• The ability to complete large, potentially very costly improvements
• The opportunity to fund those larger, expensive improvements over a period of time
• The option to finance improvements at a low interest rate
• The completion of improvements likely to increase property value and quality of life
   

Once an SSA is created, the financing for the improvements is tied to properties and not individual property owners. If one of the property owners moves, the tax payments stay with the property and become the obligation of the new owner.

To your area’s SSAs, visit: www2.illinois.gov and search for “Property Tax Statistics” and then “Special Service Areas”.