Even though he's facing a massive budget deficit and paltry support among poll respondents, Chicago Mayor Richard Daley seems prepared to run for another term next February. Sure, he warned about potential service cuts during his annual "State of the City" address yesterday afternoon. But the veteran executive devoted a huge portion of the speech to the goals he still wants to see the city achieve, such as increased business development, crime reduction, and public school improvements. "Even though these challenges are great," he told the crowd gathered at a downtown Hilton hotel, "I know we can overcome them."

Daley also sounded like a mayor who had no intention of ceding any control over his tax increment financing (TIF) empire to ease Chicago's budget woes. Twice within the first seven minutes of his speech, Daley defended the city's use of TIF funds, claiming they have brought in jobs and boosted Chicago's affordable housing stock. Watch it:

Through investments -- such as tax increment financing -- we've created and retained thousands of new jobs all across Chicago, including in struggling communities. Chicago is more competitive nationally and in the global economy today than ever. We've become a city where more businesses want to locate and create jobs. In fact, during the worst of the recession, almost 100 businesses expanded or located downtown and in our neighborhoods, creating more jobs. MillerCoors, Ford, Willis, Serious Materials, and Shop and Save Market are among them.

We've also acted aggressively since 2003 to protect our homeowners from foreclosure and we've helped build thousands of affordable housing units. We have been strategic in using TIF funds in order to leverage other funds for supporting affordable housing, and we will continue to do so.

It's hard to ignore the juxtaposition of Daley's TIF defense with the new corporate additions to the city he highlights in the section of his speech above. Why? Many have themselves benefitted from Chicago's misuse of the redevelopment tool. Let's run through a little TIF history:

Last year, at the behest of the mayor's office, the City Council signed off on a deal to give Willis Group Holdings -- a multinational insurance company -- $3.8 million in taxpayer dollars to move its headquarters to the old Sears Tower building. The justification given to voters was that without the subsidy, the company would have located elsewhere. That seems far-fetched. As we noted at the time, in addition to the $3.8 million it received from Chicago, Willis spent another $13.2 million to refurbish those new offices. That doesn't sound like a firm in need of a handout.

Or take MillerCoors, who was given $6 million in TIF subsidies just a few months before Willis to rebuild its corporate offices on Chicago's Wacker Drive. The location the firm chose, however, was renovated for $16.8 million by Carnegie Realty and D2 Realty LLC in 2007. If the specific purpose of TIFs is to redevelop "blighted" areas, this seems like a troublesome investment. The Reader's Ben Joravksy wrote about the deal last March:

According to the city, the $6 million TIF subsidy represents about 27 percent of the $21.8 million MillerCoors will spend to rehabilitate their space. The project overview does not explain why it will cost that much to rebuild a structure that was rebuilt only two years ago—without any TIF assistance, which highlights the lack of analysis in the city plan of why this rehab qualifies for help. It's hard to see a Fortune 500 company that made a $54 million profit the last three months of 2008 as a hardship case.

Serious Materials, on the other hand, is not a direct recipient of TIF funds. Using its own money last February, the company purchased the shuttered Republic Windows factory -- the site of the historic 2008 worker sit-in -- and announced its plans to manufacture eco-friendly windows. But the plant was vacant because the old owners (themselves recipients of $10 million in TIF dollars) went bankrupt, stiffed its workers, and violated the terms of its original redevelopment agreement by failing to make “commercially reasonable best efforts” at creating a minimum of 549 jobs. An attempt to recoup the money failed because the deal expired in 2006 ... without Daley administration officials having ever checked to see if Republic Windows was standing by its TIF promise.

Daley's affordable housing claim is equally suspect. Research prepared by the Sweet Home Chicago coalition contends that a measly 4 percent of TIF money has funded housing projects in the past decade. That's exactly why housing advocates are fighting tooth and nail for an ordinance that would set aside 20 percent of TIF funds collected each year to support new and rehabbed developments. The inclusion of that line in Daley's speech -- that "we've been strategic in using TIF funds in order ... to support affordable housing" seems to be a deliberate challenge to the coalition, which is consistently picking up new supporters. Expect a firm veto if the ordinance ever passes.

A lack of transparency and oversight has turned what should be a useful development tool into a massive annual slush fund for the mayor. If he's elected for a seventh term, it appear that TIF reform won't be high on his priority list.