The five tax increment financing districts (TIF) located in the 39th Ward on Chicago’s far Northwest Side had more than $24 million sitting in their collective bank accounts at the start of 2013, according to city data revealed by the CivicLab at a town hall meeting Tuesday evening.
That money would have otherwise been dispersed among the local units of government that rely on property tax revenue, including the Chicago Public Schools (CPS) district, were it not for the city’s controversial TIF program, which is intended to spur economic development in “blighted” areas.
Meanwhile, the 39th Ward’s four neighborhood schools are seeing their budgets slashed by a collective total of $2.3 million this school year due to the cash-strapped school district’s new per-student funding system, an analysis by Raise Your Hand for Illinois Pubic Education shows. The Chicago Board of Education is also set to vote Wednesday on the district’s proposed $5.6 billion budget for the current academic year, which contains $68 million in classroom cuts, including teacher layoffs, to help close CPS’ reported $1 billion budget hole.
Rick Cardis, a 39th Ward resident, said he’s concerned about the financial state of the school district and what CPS’ budget deficit may look like in a few years when his two young children are ready to attend school.
“I’m disturbed that the money gets diverted from our institutions like the parks and the schools through the TIF program,” he said at the meeting, held at Hiram H. Belding Elementary School. “I think our priority in Chicago should be our schools first and our children first.”
In 2012 alone, the five TIF districts in the 39th Ward extracted $4.8 million in tax revenue from property owners within the districts' boundaries, according to the CivicLab, a non-profit organization that provides citizens with data and tools for civic engagement.
The CivicLab kicked off its TIF Illumination Project, which highlights how Chicago’s TIF program works at the ward level, back in February. It has held 16 meetings across the city and in Oak Park thus far.
Chicago’s 154 active TIF district as of last year collected $457 million in tax revenue for the 2012 tax year, which is $3.3 million more than in 2011. Tom Tresser, co-founder of the CivicLab, noted that no other U.S. city with a TIF program has nearly as many TIF districts as Chicago does.
The city's TIF program promises to use property tax revenue for economic development projects, like a retail facility, that will supposedly generate future property taxes and economic growth inside the TIF districts. TIF money has also been used for workforce training, improving streets and other public-sector and non-profit projects.
In the case of the 39th Ward, 56.8 percent of the developments funded in part by the TIF program up until 2012 were for public projects. The other 43.2 percent of the projects were for private developments, the CivicLab found.
According to the CivicLab’s analysis, $10.3 million was awarded to a private company to develop a Whole Foods grocery store at the corner of Peterson and Cicero avenues. Another $1 million was awarded for Beltone’s hearing aid center at 4201 W. Victoria St, among other private projects.
TIF money in the ward was also used for various city improvements as well as the construction of the Albany Park Multicultural Academy. Gompers Park also saw $400,000 in TIF funds, the CivicLab's analysis shows.
But the CivicLab also found that $322,858 from the 39th Ward went to “city staff” for 2011 through 2012.
“TIFs are being used to pay people at City Hall, which is interesting,” Tresser said.
Additionally, $6.5 million in TIF funds was committed to Wells Fargo Bank for “financing,” the CivicLab found.
“That’s probably paying back a loan to make TIFs happen, but honestly it’s hard to know,” Tresser told the small crowd. “I’ve been studying these things for a few years now, and to tell you the truth, I have more questions now than when I started.”
Ald. Margaret Laurino (39th) was expected to attend the meeting, according to organizers, but one of her staff members came instead. He left, however, before audience members had an opportunity to ask questions.
A representative from CPS was also invited to attend, but instead provided a document for residents with the district’s “overview of TIFs in the 39th Ward.” In addition to Albany Park Multicultural Academy, CPS listed Mary Gage Peterson Elementary as a school in the area that received TIF funds for construction, among other park and infrastructure improvements.
Residents at the meeting said they wanted more information from the city about the specific TIF projects developed in their ward, but also how the $1.7 billion that was sitting in the city’s collective TIF district bank accounts at the end of 2012 is set to be spent.
The CivicLab helped to bring that $1.7 billion figure to light, and since then, education activists, more than 30 aldermen, the Chicago Teachers Union (CTU) and others, have been calling on the mayor to declare a TIF surplus as a means to temporarily stave off school budget cuts.
City officials have confirmed that $1.7 billion was in the TIF bank accounts, but added that the majority of the money, $1.5 billion, has already been assigned to economic development projects or is otherwise encumbered.
“The city will do this very often, you’ll catch them in a lie or mistruth ... and when you press for details you get into a war of Freedom of Information Act (requests) and lawyers,” Tresser said.
With the help of the CivicLab, CTU filed a Freedom of Information Act (FOIA) request with the city on August 2, which called for a full accounting of that $1.7 billion and all the contracts and paperwork for the projects slated to receive TIF funds. Ten days later, the city denied the FOIA request, essentially telling CTU to “take a flying leap,” Tresser said. In its two-page FOIA denial, the city said CTU could find the information it was looking for on the city’s website, Tresser added.
Tresser suggested that the CTU should “lawyer up” and fight the FOIA denial.
“We’re not going to get an answer to that question without a fight,” he said.