Imagine, if you will, traveling through another dimension, a dimension
not only of sight and sound, but of imprudence. A wondrous land where
more than $500 million a year is spent off-budget; a land where $500
million does not appear on a single tax bill; a land where $500 million
is spent to spackle the cracks of waste, bloat, patronage, and
corruption.
Welcome to the land of Tax Increment Finance districts (TIFs). Although that $500 million figure is merely the amount of revenue collected through TIFs in Chicago in 2006, the TIF twilight zone extends throughout Illinois, scooping up hundreds of millions more in taxpayer dollars every year.
Tax increment finance is one of those issues that bores you silly before you learn something about it -- and then it outrages you. Simply put, TIFs are widely-used economic development tools which capture all new property tax revenues within a specified “district” and reinvest them within that area’s borders for public improvements and private development incentives. Originally intended as a way to spark redevelopment of blighted or near-blighted neighborhoods, the network of TIFs now extends to such downtrodden areas as Chicago’s Loop -- encapsulating such notable tenements as the Sears Tower, Chicago Board of Trade, and City Hall.
Once a district is designated, any additional property revenue generated there over the next 23 years is directed to a TIF account and therefore is unavailable to the city agencies that oversee the schools, parks, libraries, etc. As a result, these agencies are often forced to raise their tax rates to generate the same amount of revenue. Of course, those higher rates fall directly on the taxpayers.
