Is Northwest Side Ald. Tom Allen (38th Ward) emerging as the Chicago
City Council's leading tax increment financing (TIF) watchdog? Since
Mayor Daley began to detail just how bad the city's finances have
become, Allen has been one of the most vocal critics of the mayor's ...
Is Northwest Side Ald. Tom Allen (38th Ward) emerging as the Chicago City Council's leading tax increment financing (TIF) watchdog? Since Mayor Daley began to detail just how bad the city's finances have become, Allen has been one of the most vocal critics of the mayor's decision not to crack open his $1 billion "piggy bank" to ease the financial crisis. The Sun-Times' Fran Spielman caught his latest remarks during a budget hearing yesterday:
It was opening day of City Council budget hearings, and Chicago aldermen were loaded for bear [...]
They railed about the mayor’s plan to spend all but $730 million of the combined, $3 billion in Chicago Skyway and parking meter proceeds while allowing tax-increment-financing (TIF) districts to siphon $540 million-a-year away from the city’s property tax base.
“We should re-name it the ‘Over-tax fund’ — OTF. How can we with a straight face tell the citizens of Chicago that, ‘We have $1.1 billion of your money stuffed under our mattress, but don’t worry. We’re gonna give you $35 million in [property tax] relief?’ ’’ said Ald. Tom Allen (38th).
City officials have tried to quash the suggestion; for instance, CBS 2 reported their response this week that TIF funds are off limits and can't be tapped for general operating expenses. Perhaps if more local reporters understood how TIF districts operate, they wouldn't be so quick to take the bait. The fact that many gloss over is that the TIF funds represented diverted operating dollars. As such, the growing loss -- $552 million last year alone -- is putting strain on the taxing bodies' finances.
As we've pointed out before, if the Daley administration would get creative with TIF and begin retiring districts that go unused or have met their objectives, millions in surpluses could be released back into the general fund. Yet Daley has gone to great lengths to distort the intent of the law (reversing blight), instead using the cash to help deep-pocketed companies with political connections land millions for their high-end developments. Departed Tribune business columnist David Greising recently described the practice "a racket."
Then there's the issue of leveraging the existing TIF funds to jumpstart the local economy. In the same report we criticized above, CBS 2 picked up on a worthy use of TIF funds today that we've been writing about for months: building affordable housing. Instead of investing in such projects, the mayor has long squandered "affordable housing" money on sweetheart deals that benefit the wealthy and politically connected at the expense of people who are facing a severe affordable housing crisis. Those choices are also placing additional strain on the city's operating budget as $1.4 million more is now being spent on homeless shelters that are overwhelmed by families who can't find an affordable place to live.
So to Ald. Allen's latest complaint, we say: more like this, please.