Over 90 Percent Of Daley's Property Taxes Go Towards TIF
Each fall, Cook County Clerk David Orr releases an annual tally of how much public money has been absorbed into Chicago's massive
tax increment financing (TIF) system. Like clockwork, each new report
reveals that hundreds of millions are whisked away from
schools, parks, ...
Each fall, Cook County Clerk David Orr releases an annual tally of how much public money has been absorbed into Chicago's massive tax increment financing (TIF) system. Like clockwork, each new report reveals that hundreds of millions are whisked away from schools, parks, libraries, and other taxing bodies. The exact amount each taxpayers kicks into Mayor Daley's "glorified slush fund" has remained elusive, however, as now-Congressman Mike Quigley wrote in a Progress Illinois column last year:
The single worst aspect of the TIF system in Cook County is that taxpayers residing in the districts have no idea how much of their tax payments end up in TIF accounts. Indeed, while TIF is listed on every bill alongside the agencies receiving property taxes, the line always reads $0.00. This is due to a quirk in the way the County Clerk has historically calculated tax rates. But as a consequence, the taxpaying public is misinformed.
That changed yesterday, when Orr took a major step towards unlocking that part of the TIF mystery. Along with his tally for 2008, the Clerk's office has unveiled an online search engine
that allows those who reside in TIF districts to find out (using their
permanent index number) how much of their tax bill is being siphoned
away.
For fun, we plugged in Mayor Daley's PIN number (17-22-109-027-0000) and found that a whopping 92 percent of his property taxes were redirected into the Near South TIF last year. By contrast, cash-strapped schools are getting a mere 3.9 percent of the Daley's property tax dollars. This goes to show how much strain the TIF system are putting on those local taxing bodies entrusted to deliver education and other public services.
We're not talking about pocket change, here. By Orr's count, the TIF network has collected upwards of $3.6 billion in taxpayer dollars since 1986. Meanwhile, neither the public nor the city's aldermen can gain a comprehensive look at this "shadow budget." By the clerk's count, $495 million was skimmed (PDF) during the 2008 tax year.* The clerk's latest report shows an 11 percent decline over during that period, largely attributable to the expiration of the huge Central Loop district. In its wake, the LaSalle Street district is the new ground zero for corporate welfare in Chicago, handing out goodies to the politically-connected. Soon that it will have some major buying power; in just its third year, the district pulled in a cool $26 million. Meanwhile, truly blighted areas -- which TIF is intended to help turn around -- aren't faring nearly as well. More from the Reader's Ben Joravsky:
As Orr's report makes clear, the neighborhoods receiving the most in blight-fighting TIF money are the wealthiest. For example, the Roseland/Michigan TIF on the far south side collected $834,203 in 2009. In contrast, the top TIF taker was the Near South TIF, just south of the Loop, which brought in $54.7 million. By the way, Mayor Daley happens to live in that TIF district [...]
So in the fight against blight in Chicago it's the wealthiest communities with the least amount of blight and the most political connections that get the goodies. Funny how that works.
Hopefully, media outlets and concerned citizens will being spreading the word about Orr's new tool. Generating interest in this arcane -- but extremely important -- issue depends on illustrating taxpayers' individual financial stake taxpayers have in the TIF system. Now we have a way to do just that.
* Regular readers may recall the $552 million figure that Robert Ginsburg, Ph.D. and Don Wiener, Ph.D. recently tallied up on behalf of SEIU's Illinois Council (which sponsors this website). Why the discrepancy? The $552 million sum is based on the city's TIF annual reports for 2008. The revenues disclosed in those reports are based on taxes collected during 2008, which in turn are pegged to property values during the 2007 calendar year. Orr's latest revenue figure, by contrast, is based on the tax bills sent out this fall, which are based on property values during 2008. Therefore, Ginsburg and Weiner's count includes the Central Loop revenue, while Orr's tally does not.
Comments
"By contrast, cash-strapped schools are getting a mere 3.9 percent of the Daley's property tax dollars. This goes to show how much strain the TIF system are putting on those local taxing bodies entrusted to deliver education and other public services."
This statement isn't accurate. Local taxing bodies are free to levy as much as they need, TIF or no TIF - the only difference is that everyone pays more in taxes to fund both the TIF and the schools. If the TIF Daley is in didn't exist, he would still pay almost as much in taxes: he would pay the taxing bodies more, and everyone else would pay them slightly less. So really, the ones strained by TIFs are the taxpayers, not the taxing bodies.
That's a fair point, Rimaye. Local taxing bodies are indeed often forced to raise their levies to make up for the money being siphoned away by TIF. These are the "stealth tax increases" that Ben Joravsky often cites.
Do these increases make up for all the money being lost to TIF? Not necessarily. So it's not "inaccurate" to say that the taxing bodies themselves are "strained." But you're right to note that the taxpayers are bearing the brunt as well. It's a point that we should highlight more often.
Local taxing bodies are not "forced to raise their levies"; if they ask for $50 million, they get $50 million. As I'm sure you're aware, in Illinois, we have a levy-driven system, meaning the budget requests determine the tax rates. What you are talking about are tax rates - and yes, tax rates increase to make up the difference between the levy and the taxing base minus the TIF base that's frozen. But as long as tax rates don't hit their limits, the only thing that schools and other agencies are losing is the one-year bump from new property that isn't included in the tax rate calculation.
I don't doubt that our taxing bodies are "strained," but I'm not so sure it's because they're missing out on that one-year bonus. It seems more likely to me that our state's overreliance on property taxes to fund education and other services is the bigger culprit. With that said, I appreciate your organization's (much-needed!) work on TIF reform. I just wish it was a bit more accurate--though given the complexity of the topic, I realize that it's difficult to be both accurate and clear.
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