Progress Illinois

During the Wilson Yard TIF amendment meeting, Helen Shiller stated that increasing TIF collection would not adversely affect other city services.

Of course, she lied.

Thanks PI for pointing out that the City Council and the Mayor are a pack of greedy, harmful liars.

This is the worst logic I've ever seen being exhibited by the writer, persons quoted in the article and the above comment.

TIF is not siphoning off money from the schools (or anywhere else), because this increased tax revenue wouldn't exist without the TIF in the first place. The tax on the increment of these properties goes into the TIF funds to pay costs of the public infrastructure improvements. You can make the argument that the surpluses in these funds should go back to the schools, but the schools are still getting the same amount of income of these properties as they were before TIF-funded improvements took place.

If you take a close look at the budget, you'll see that TIF districts that have not yet implemented their "improvements" (read: gentrification) are making profits. Property taxes rise at the whim of the assessors. Please don't fool yourself.

Also, if you look at the reports, many times the "public infrastructure improvements" TIF funds invest in are Starbucks, reflective beans, or similar nonsense.

One slam-dunk example: In 2007, the schools were getting what they would have gotten from the Central Loop TIF district in 1984. As we all know, it costs more to get by today than it did in 1984. So instead of getting the $50million cost of living increase that CPS should have been getting if Chicago used the normal bullshit property tax laws, it turned into $100 million dollars for the Olympics.

The logic is sound.

"With a little creativity and courage on the part of Chicago aldermen -- as well as state legislators -- some of that money could be freed up and the ongoing drag on local taxing bodies could be lessened."

Why did you include "state legislators" here? My humble understanding is that your three excellent suggestions for freeing up outstanding TIF balances could each be accomplished by the Chicago City Council without changes in our state TIF law.

"The surplus remains that large even after the city retired the Central Loop district (a.k.a. the "granddaddy" of all TIFs) and went on a spending spree with the remaining balance."

If there's one lesson from the Central Loop TIF district close-out, it's that we need to assert our right to fair and complete accountability of financial commitments in TIF reporting. In particular, the most important piece of the puzzle we are currently missing is an accounting of bond and note sales backed by TIF revenue. Incredibly, this category of information is absent from all of Chicago's TIF annual reports.

$167M of the $255M that was apparently unallocated in the Central Loop TIF district going into 2008.went to pay off bonds. This liability was never disclosed in previous Central Loop TIF district annual reports.

The City is quick to claim TIF funds are spoken for but we never take them to task on an accounting of those commitments. If the City had a real commitment to transparency, it would be very simple to include a table in each TIF annual report detailing the schedule of outstanding negotiable debt.

"TIF is not siphoning off money from the schools (or anywhere else), because this increased tax revenue wouldn't exist without the TIF in the first place."

May I have some of your kool-aid, please? Property values go UP over time, and tax rates go UP, and the property tax revenue generated by a piece of real property goes UP, inside & outside TIF districts..

Hey Hugh,

Thanks for all your comments.

In response to your 15:17 post, we mentioned "state legislators" because they could contribute to TIF reform by changing the state statute to index each district tax base to the Consumer Price Index.

Could the Chicago aldermen also address the inflation issue?

OK, thanks, I understand, in asking for help from the state legislature you are expressing your support for Quigley's excellent suggestion for a change to state law mandating indexing the tax base to inflation, a modest and eminently reasonable first step toward reform.

While we're waiting for that, my humble understanding is that there is nothing preventing our Village Elders from accomplishing the same goal (more equitable revenue sharing with the other taxing bodies) using a variation of your excellent suggestion #1: declaring a surplus; the Council could within current state law each year declare a % of the increment in each TIF as excess of the TIF plan and leave it on the table to be dispersed to the taxing bodies.

Elsewhere in Illinois where a municipality proposing a TIF district has to actually work to garner consensus from the taxing bodies comprising the TIF Joint Review Board, the municipality builds into the TIF district plan a schedule of "make whole" payments to the other taxing bodies, most often a school district or library district. Look at any Evanston TIF for example. In the monolithic govt of Chicago this step is not necessary.

"TIF is not siphoning off money from the schools (or anywhere else), because this increased tax revenue wouldn't exist without the TIF in the first place."

Try to keep up. This TIF propoganda has been denied by the Illinois Appellate court. You can't throw a rope around an area and call its property tax revenues "Mine!"

"We find that property and sales taxes are parts of the general revenue of the City whether or not they are earmarked for a specific purpose or placed into a special account."

Mallec v. Belleville, 7/16/08

Some of the TIF money is already going to general operating expenses. Every TIF reimburses the City for Department of Planning and Development (now the Department of Community Development) staff time spent on planning and implementing the TIF. Tax payers are essentially paying staff up to two times (depending upon how much time staff spends on TIF work)--once from the general fund, and once from the TIF.

"...much development in TIF districts would likely have taken place with or without the TIFs."

In Chicago a very common pattern is that TIFs slow development. In the years ramping up to the establishment of a TIF districts, land bankers with the inside skinny jostle for position in the proposed footprint, grabbing and holding properties, razing buildings and halting improvements lest they contribute to higher assessments that might derail the blight qualification. After the TIF district establishment, nothing happens without TIF subsidies, so communities wait as the TIF fund builds up, and the Daley administration's ability to package and approve subsidies in 160 TIF districts becomes a bottleneck.

"Some of the TIF money is already going to general operating expenses. Every TIF reimburses the City for Department of Planning and Development (now the Department of Community Development)..."

The Daley administration helps themselves to a haircut from TIF funds to operate not just DCD but also the Law Dept. and Streets & San. See "Appendix A Anticipated Reimbursements from Other Funds to the Corporate Fund" in the 2008 Budget, page 451:

Y - Tax Increment Financing
031 Department of Law $1,000,000
054 Department of Community Development 661,304
081 Department of Streets and Sanitation 800,000
Total Y - Tax Increment Financing $2,461,304

The $1M and the $800K are such nice round numbers that they smack of being pulled out of the air rather than based on time reporting.

This $800K to Streets & San is apparently distinct from any TIF funds to Streets & San for "public improvements" in particular TIF projects.

An interesting project for an ambitious young person would be to see if the total dollars declared in all 160 TIF annual reports as spent on "City staff costs" is in the same ballpark as the $2.5M declared in the budget as operating revenue from TIF.