Daley

Ald. Colon On The Parking Meter Lease: "We Should Have Bit The Bullet"

Angela Caputo — Fri, 20 Nov 2009 12:09:34 -0800

The Windy City edition of the New York Times debuted today, featuring an article on the controversial parking meter lease from veteran City Hall reporter Dan Mihalopoulos, now with the Chicago News Cooperative.

In his report, Mihalopoulos digs into the books of Chicago Parking Meters LLC, the private company that now controls the city's meters under a 75-year, $1.15 billion deal with the city. He found -- not surprisingly -- that the company's profits are growing steadily, generating $1.1 million per week, thanks to the higher rates they instituted after taking over the system. With more gradual increases on the way, the company is projected to collect $46.9 million this year and $79.5 million in 2010.

The most candid remark in Mihalopoulos' piece came from Ald. Rey Colon (35th Ward), who was one of five aldermen to vote against the 2008 ordinance approving the parking meter deal:

Another of the naysayers on the Council, Rey Colon, said this week that the parking meter company’s own numbers showed that aldermen should have raised parking charges and kept the money that the increases would have generated.

“At this rate, it was a great deal for the parking meter company,” he said. “I don’t know if it was a good deal for the city. We should have just bit the bullet and done it ourselves.”

Mayor Daley and some of the aldermen who supported the deal like to make the argument that the city could not have "bit the bullet and done it ourselves" for political reasons. They further argue that their chosen path -- offloading the responsibility for the system to a private company (who then raises the rates) in return for an immediate windfall -- was a safer approach. But was it? As then-Inspector General David Hoffman noted in his report on the deal, it's not like the mayor and the city council dodged the bullet; indeed, they've have still taken a great deal of flack for the rising parking costs (not to mention the botched implementation). Furthermore, other cities have managed to hike rates and generate revenue for their operating budgets without experiencing some apocalyptic voter backlash. Some of them, such as San Francisco, are even using their meter system to experiment with innovative congestion controls. It'll be 75 years before we have a chance to do the same.

To add insult to injury, the proceeds of the deal are almost gone thanks to the city's gaping budget deficit, so taxpayers will soon have little to show for the lease. CPM, however, will make out just fine.

The question now is whether the City Council will learn from its mistake. So far, a mere 12 of the council's 50 members have signed on to Ald. Scott Waguespack's (32nd Ward) Asset Lease Taxpayer Protection Ordinance, which would require an “independent third-party valuation” on any future asset sales, including “a comparison of public retention and private leasing over the life cycle of the agreement." As Waguespack himself said recently, it's time to acknowledge that "the old way of doing things no longer works."

"A TIF Geek If There Ever Was One"

Josh Kalven — Fri, 20 Nov 2009 07:40:49 -0800

That's how the Reader's Ben Joravsky describes our own Angela Caputo in his latest article on Chicago's tax increment financing (TIF) network. And you can bet she's wearing that badge with pride.

Joravasky's piece also details how state legislators used a Freedom of Information Act (FOIA) bill to quietly extend the lifespan of four Chicago TIF districts by 12 years. With little to no debate, the bill was passed by both chambers in the final days of the regular session and signed by the governor in late August. Joravsky later notes that the projects to be subsidized by these districts during the extended period appear worthwhile, at least when compared with "some of the stuff the mayor comes up with, such as the recent $35 million handout to United Airlines." But the process of approving the extension should nonetheless raise eyebrows:

You'd hope that in these calamitous economic times, Governor Quinn, house speaker Michael Madigan, and senate president John Cullerton would feel compelled to hold hearings and engage in debate before effectively raising Chicagoans' property taxes. But you'd hope in vain.

Joravsky further writes about Cook County Clerk David Orr's new TIF search engine and gives some great instructions on how to research the amount of individual property taxes that go into Daley's slush fund. Read the whole thing here.

Yesterday At City Hall: Daley's Budget, Wal-Mart, DREAM Act, Police Transparency

Angela Caputo — Thu, 19 Nov 2009 13:12:16 -0800

The Chicago City Council held its full monthly meeting yesterday. We've got some of the highlights:

Budget Priorities Take A Beating

All eyes have been on Mayor Daley's 2010 spending plan as of late, which relies on $370 million from the city's asset-sale proceeds to help balance next year's $6.14 billion budget. Despite this windfall, the safety net is still going to take a hit. During the public portion of yesterday's meeting, several social service providers testified in favor of restoring the cuts to substance abuse and mental health funding. As regular readers may recall, the city's 12 mental health clinics will lose an additional $3 million in state funding this year because of the Daley administration's own incompetence at implementing a new $16 million billing system.

In response, Ald. Joe Moore (49th Ward) voiced support for rescinding the cuts and blasted Daley's "property tax relief" gimmick -- a plan introduced yesterday to pull $35 million from a reserve fund created by the parking meter lease to refund some taxpayers between $50 and $100 on their bills. "What impact is that going to have on those homeowners lives? It's very negligible," Moore said. "I think you're going to get a lot more bang for your buck by helping the mentally ill lead productive lives through counseling and other support services." Listen:

Internal mp3

Ald. Moore isn't the only one slamming Daley's meager property tax rebate. After combing through the budget proposal, the Civic Federation concluded (PDF) that, while the city should indeed pull $56.5 million from the parking meter human infrastructure fund for operating expenses, none of it should go to Daley's so-called property tax relief. Elsewhere in their report, the business-friendly think tank pushed for greater cuts and chided the mayor for dipping into the asset sale reserves, urging the City Council to enact certain safeguards.

The Federation also called out Daley's efforts to keeping the vast tax increment financing (TIF) budget hidden in the shadows, noting that there's no excuse for excluding "full financial information including expenses, revenues, fund balance and debt" from the annual budget.

Lyle Slams Proposed Wal-Mart Expansion

Later in the meeting, one of City Hall's most reliable critics of Wal-Mart's race to the bottom, Ald. Freddrenna Lyle (6th Ward), went toe-to-toe with Chicagoland Chamber of Commerce President Jerry Roper yesterday over the mega-retailer's push to open additional stores in Chicago. The common refrain from pro-business groups like the Chamber has been that the South Side is lucky to attract any new jobs in this economy and that the community is starved for low-cost retailers.

Lyle isn't so sure. "We have been taught as a people in the past 20 or 30 years that we're just consumers and all we should be looking for is the lowest price. But we're not just consumers," she said. "We're citizens, we're parents, and hopefully, we're taxpayers ... While I want the lowest price, I don't want to do it at a cost of impoverishing my neighbor." Listen:

Internal mp3

Lyle's remarks came after several other aldermen questioned Roper about Wal-Mart without bringing up the issue of wages.

Keeping The DREAM Act Alive

Yesterday, aldermen reaffirmed their support for Sen. Dick Durbin's DREAM Act by handily passing a resolution (by a 49 -1 vote) that calls on Congress to create a path to citizenship for young adults who've spent most of their lives in the U.S. The plight of Rigoberto Padilla -- an honor student from the University of Illinois at Chicago who is scheduled for deportation next month based on a misdemeanor DUI offense -- has become a prime example of the need for comprehensive immigration reform. With Congress poised to act next year, aldermen are calling on the U.S. Department of Homeland Security (DHS) to halt the deportation of students like Padilla who would be eligible for legal status under Durbin's measure. Alds. George Cardenas (12th Ward), Manny Flores (1st Ward), Ricardo Muñoz (22nd Ward), Danny Solis (25th Ward), and Toni Preckwinkle (4th Ward) took the lead on the resolution (Ald. Jim Balcer cast the sole "no" vote).

Here's what the Illinois Coalition for Immigrant and Refugee Rights (ICIRR) had to say following the roll call:

The plight of Rigo, a student at the University of Illinois at Chicago (UIC), illustrates what is wrong with current immigration laws. He came to Chicago at age 6, and has lived in Chicago most of his 21 years. During this time, Rigo has been deeply involved in the community, volunteering, studying, working and in general making Chicago a better place. Nevertheless, he is scheduled for deportation on December 16.

More than 400,000 immigrants have been deported in the past year, with damaging consequences for countless communities. Rigo is a great kid, an outstanding student, a hardworking young man with many aspirations and dreams to become better and to contribute more to this country, the country he calls home. The passage of this resolution is a symbolic action that sends a very powerful message to Immigration and Customs Enforcement (ICE) and DHS: we cannot allow more lives to be destroyed by an unfair, outdated immigration system that doesn’t reflect our values as a country of opportunity and fairness.

More Transparency From The Police Board?

The Chicago Justice Project (CJP) made a splash last month when it released a report questioning why the city's Police Review Board -- the last line of defense for police accountability -- is so reluctant to fire wayward police officers. Despite the police superintendent's own recommendation to cut certain officers loose, CJP found that the board inexplicably kept 63 percent of those officers on the payroll.

Ald. Bob Fioretti (2nd Ward) responded yesterday by introducing an ordinance that would require the board to better explain those decisions. The Sun-Times explains:

Fioretti is proposing that board members’ individual votes on officers’ disciplinary cases be posted within two business days on the Chicago Police Board’s Web site and stay online for at least two years. He also is proposing that all findings and decisions — including an explanation of the reasoning behind them and a rationale for dissenting votes — be posted online for two years, too.

Under Fioretti's measure, board members -- nearly half of whom skipped 30 percent or more of the monthly meetings -- would also see their annual stipends cut. Term limits would also be imposed so board members could only serve consecutive five-year terms. “CJP fully endorses these ordinance revisions,” writes executive director Tracy Siska.

Is This Daley's Idea Of TIF Transparency?

Angela Caputo — Tue, 17 Nov 2009 12:18:13 -0800

Mayor Daley appears to be feeling the pressure to come clean about his plans to spend the city's $1 billion tax increment financing (TIF) surplus. As regular readers know, the city's unprecedented budget shortfall has opened the door to some long-overdue questions about why the public funds ($495 million in 2009 to be exact) siphoned off the tax rolls each year aren't folded into the public budgeting process. On Friday, Daley went on the offense, citing a recently-renovated bridge as an example of how the TIF system isn't shadowy at all, but rather an expansive public works campaign that's unfolding in plain sight. From the Tribune's report:

Aldermen who want greater control over how tax increment financing funds are used in their wards are "beating the heck out of us" without appreciating how the money has improved their neighborhoods, Daley said at an event to mark repairs on the Cherry Avenue bridge connecting North Avenue to Goose Island. The bridge renovation was funded in part using $3.75 million collected from a special taxing district in the area, where property tax collections were frozen to help finance infrastructure repairs [...]

"Some of the aldermen are questioning it. That's why they're not here today, to be very simple. Because they don't think it should be used for this purpose," Daley said.

For the past year, we've been following the TIF debate very closely and have yet to hear an alderman protest the use of the funds on a public works project. What's come under fire is the fact that the money is being doled out in secret -- and often in the form of corporate welfare -- at a time when public services have been slashed and property owners taxed to the hilt.

Moreover, most aldermen probably aren't so fond of how the mayor uses his control of the TIF honey pot to keep them in line. As the Reader's Ben Joravsky and Mick Dumke explained in their latest investigation, those who cross the mayor can often forget about getting a new school or other public works project in their ward:

By moving more necessary expenditures into the secret budget that he ultimately controls, the mayor also wields even more power over every public entity, from the City Council to the public schools to the Park District. At various times at least half a dozen aldermen have told us that mayoral aides pressure them on key votes—such as the ordinances for funding the Olympics or moving the Children's Museum to Grant Park—by either promising to give their wards more TIF dollars or threatening to take TIF dollars away.

When you consider the amount of power Daley derives from the TIF system, it's not surprising that he continues to make weak pledges regarding transparency, such as his latest promise to put together "a full list of all the examples" of TIF-funded projects. As Greg Hinz recently put it, the mayor needs to "cut the bull" and let the public and their representatives have a look before these public funds are spent.

Over 90 Percent Of Daley's Property Taxes Go Towards TIF

Angela Caputo — Tue, 10 Nov 2009 11:54:49 -0800

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.

Round Two In The Fight Over Outsourcing Chicago Schools

Angela Caputo — Tue, 10 Nov 2009 10:44:41 -0800

With less than a week to go before the Chicago Board of Education votes on whether or not to authorize six new charter schools, Chicago Public Schools (CPS) held a round of public hearings last night. School reform advocates have long complained that CPS handpicks which charters will get the green light long before the hearings begin. And the opaque nature of the process generated a lot of criticism last year. As a result, officials are treading more lightly as they move forward this year.

Unlike in the previous years of Mayor Daley's Renaissance 2010 program, only a handful of new charters are being considered this time around. Still, CPS chief Ron Huberman is recommending that an additional 8,130 charters seats be made available next fall, according to an analysis by the Caucus of Rank and File Educators (CORE). Alexander Russo reports that the established private school operators appear to have a leg-up:

Just six new schools are being recommended for approval -- most of them add-on campuses of existing networks. Fourteen did a full application only to get rejected. Meanwhile, a slew of existing contract schools are vying for charterization thanks to the newly lifted charter cap.

Contract schools -- which are also privately-managed but allow teachers to join collective bargaining under the Chicago Teacher's Union -- began to spring up when CPS nears the cap on the charter schools (originally set at 30). Regular readers may recall that the General Assembly agreed to lift that cap last spring, effectively allowing the number of Chicago charters to double. Under that same legislation, lawmakers also agreed to allow these schools to hire non-certified teachers to fill 25 percent of their classrooms. Tim King, founder of the all-boys Urban Prep on the city's West Side, tells Catalyst that he's among those hoping to transition from contract to charter status this year so he will have the "same freedoms as charter schools" (i.e., the ability to hire non-traditional, uncertified staff). That has members of CORE -- a grassroots, pro-labor coalition -- justifiably upset. "These so-called reform efforts have nothing to do with reform," high school teacher and CORE spokesman Kenzo Shibata tells us. "They're just a way of busting our union."

Indeed, am influential report recently revealed that there is no evidence that Mayor Daley’s school “reform” program is actually improving district performance. Not only is academic achievement flat, but the Consortium for Chicago School Research reports that a vast majority of the elementary students uprooted between 2001 and 2006 were merely shuffled into other failing schools. No wonder CPS has been so secretive about the closing process.

Shibata describes the school board's vote on the latest charters as the first of a 12-round fight. The second round will come in January as more school closure recommendations are announced. That's when Chicago Democratic State Rep. Cynthia Soto's hard-fought battle to bring transparency and create clear criteria over the closure process will likely come to a head.

In the meantime, CORE is setting its sights on overturning a 1995 state law that gave Mayor Daley control of Chicago's schools in the first place. "Labor law doesn’t allow a company to close down a union plant and open up a non-union one across the street," teacher and CORE member Jackson Potter writes in a release, "but that’s exactly what Chicago Public Schools has done for the last six years without pause."

Stay tuned ...

Tribune: Daley Has Gotten "Carried Away" With TIF

Josh Kalven — Mon, 09 Nov 2009 08:57:48 -0800

Since the Reader's Ben Joravsky and Mick Dumke published their latest report on Chicago's shady tax increment financing (TIF) system, we've noted the increasing media attention being devoted to the issue, with some reporters even going so far as to refer to as a "huge problem" for the city. Today, as the city budget hearings wind on, the Tribune editorial board does its part to keep the story alive in a piece titled, "It's Our Money." The board takes that reasonable (and familiar) position that, while TIF can be a valuable and effective economic development tool, Mayor Daley's use of it has gotten out of hand:

TIFs are meant to revitalize blighted areas that wouldn't otherwise be attractive to developers. By designating an area a TIF district, the city lays claim to the new tax dollars generated by rising property values there. Those dollars are supposed to be reinvested in the district to promote growth.

TIFs are one of the better redevelopment tools available to local governments. But Chicago has gotten carried away, creating a vast redevelopment wonderland controlled by the mayor. More than a third of the city, including the LaSalle financial district and most of the Loop, now falls within TIF districts. Though it stands to reason that an area that raises hundreds of millions of dollars in property taxes is no longer blighted, if it ever was, the Daley administration insists the TIFs are needed to keep those skyscrapers from falling into disrepair.

The board goes on to call for more transparency: "Open the books, Mayor. Put everything out in the open so taxpayers can see how their dollars are spent."

It's great to see more and more voices in the local media speak up about the TIF "mission creep." A more transparent system is obviously needed. But we should also recognize that there are ways to scale back the system and lessen its drag on local taxing bodies. Learn more about them here.

Daley's Mental Health Blunder Continues ...

Angela Caputo — Fri, 06 Nov 2009 09:39:25 -0800

This past spring, a new $16 million system implemented by the Chicago Department of Public Health (CDPH) turned out to be so flawed that patient mental health bills weren’t submitted to the state for six months in 2008. This so-called "glitch" led to a loss of more than $1million in state funding and almost resulted in the closure down four clinics on the city's South Side. Back in July we took Daley administration officials at their word when they said that the problems were fixed.

Big mistake.

During the ongoing city budget hearings yesterday, it was revealed that the system is still not working properly. Outgoing CDPH chief Terry Mason told aldermen that fixing the $16 million Cerner system -- which was supposed to represent an upgrade -- remains "an active process."

To his credit, Ald. Rick Munoz (22nd Ward) pressed him on the matter: "You're saying that after 18 months you're unable to work out technical glitches that prevent us from billing the state?" "That is correct," Mason responded.

Budget Committee Chair Ald. Carrie Austin (34th Ward) assured Munoz that the Cerner system would be fixed within "months."

"Months?" Munoz asked. Austin replied that she couldn't offer a "specific date."

Indeed the Cerner set-up is so riddled with problems that staffers are now using a different technology (Custom Information Systems) to log daily billing forms, according to an internal CDPH memo cited by the Tribune and obtained by Progress Illinois:

Even before the city dropped the ball on the billing system, mental health services were in short supply. This is largely do to the Daley administration's gradual reduction of funding for the dozen mental health clinics that still exist throughout the city. We dug through some budget documents and found that in 2006, the city committed (PDF) $6.6 million in general revenue to staff the clinics. This year, the recommendation (PDF) has fallen to a mere $3.5 million.

Meanwhile, because of boneheaded billing problems, state reimbursements for the clinics is projected to fall in FY2011 to $4.2 million from $7.2 million this year, according to budget documents.That's $3 million out the window because of the faulty system.

The repercussions are already being felt. Mason testified that clinic staff is down to 108 from 216 and 4,000 patients have been dropped from the clinics' rolls this year. "What happens to people who need human services?" Munoz asked Mason at the hearing. "Who tracks that?"

The question was met with silence.

Daley Tries - And Fails - To Defend His TIF Empire

Angela Caputo — Mon, 02 Nov 2009 12:36:13 -0800

With his public opinion at an all-time low and questions circling about his "creative" city financing, Chicago Mayor Richard Daley is making the media rounds -- sitting down with both WLS' Bill Cameron and WBEZ's Eight Forty-Eight in recent days. Not surprisingly, Daley is trying to blunt criticism that his shadowy tax increment financing (TIF) system has become a major drag on the city's finances, contributing to this year's historic $520 million shortfall. Instead of coming clean on the public funds that he's skimmed off the tax rolls, Daley is making more bogus claims to divert attention from his "glorified slush fund." Here's some excerpts from his conversation with WBEZ's Allison Cuddy, along with our responses:

DALEY: Most TIF funds don't generate any money. Most TIF funds are used for schools, parks, libraries, ex-offender programs, job training, economic development to keep jobs here. And I'll go over each TIF to show you that.

CUDDY: But you generate about a half-a billion in TIF funds per year.

DALEY: Not quite. No, I don't think so.

CUDDY: And you have about a billion in cash.

DALEY: No I don't think so. I don't think it's that high. Most of it's pledged already for a school, a park, a library. Most of it's pledged for economic development in depressed areas to bring back jobs or to keep jobs there.

The mayor doesn't "think" that his TIF network siphons off around a half-million dollars per year? In 2008 alone, the TIF system siphoned $552 million off the tax rolls, based on annual reports signed by Daley himself. Cook County Clerk David Orr also tracks the numbers and reports that $555 million was diverted in 2007.

And what about the surplus Cuddy cites? We were one of the first local outlets to report that the city's TIF network ended 2008 with $1 billion in unspecified "special revenue funds." Where did we get that figure? Why, from Daley's own Department of Community Development, who included the numbers in a document provided to the City Council.

As for Daley's assertion that most of the surplus is "pledged," that's more or less true. Indeed, the document also disclosed that the city planned to spend between $478 million and $643 million on new redevelopment projects in 2009. But this doesn't change a thing. Considering that the TIF network will likely siphon off another $500 million this year, it seems safe to say that it will once again end the year with a hefty surplus.

Oh, and about Daley's point that TIF funds are often used to build "a school, a park, a library," that's a problem as well, as the Reader's Whet Moser notes today.

CUDDY: But TIFs divert money from parks and schools, no?

DALEY: No it does not.

CUDDY: Because it freezes the property tax...

DALEY: No, no, no

CUDDY: ...And it goes into development funds

DALEY: No it doesn't because there's no growth of tax in those districts. If you look at those districts there's no growth of taxes. Otherwise it's decreasing. In a suburban area they TIF'd everything. It's amazing in a suburban area, to keep their small communities alive. This is to help depressed areas. Take the West Side of the city, take a drive there. They don't really create a lot of money in TIFs. You hope to grow it so you can bond money out. That's what you have to do.

CUDDY: To attract the development?

DALEY: Yes.

It's not surprising that Daley is trying to focus the attention on the use of TIF in "depressed areas." After all, the law enabling this economic development tool stipulates that it be used in "blighted" neighborhoods. But the mayor long ago abandoned that intent, instead opting to invest heavily in the Loop, throwing TIF dollars at deep-pocketed interests like United Airlines, the Mercantile Exchange, and insurance giant Willis Holdings. The city insists that this type of corporate welfare will ultimately boost the tax base. But there is no real oversight in place to test those theories. It basically amounts to blind faith.

DALEY: The only way to look at TIFs is to break down and look at what it's accomplished in each community. It's amazing. Otherwise, those things, affordable housing, the Kennedy King. That came from a TIF district to build the Kennedy King. It didn't come from the federal government.

CUDDY: That's a big accomplishment.

DALEY: Yes.

CUDDY: But you say that you'll give a full accountability. But they say, the Chicago Reader charged that there isn't enough transparency. The aldermen are saying it too. Why not show how much money is there, where it will go.

DALEY: Each district will find out. I think we'll find out. It should be.

CUDDY: But the whole big picture.

DALEY: Each district has that. Each district has that.

CUDDY: Will you go forward making that more transparent?

DALEY: Sure we will. Sure we will.

Even those willing to give Daley the benefit of the doubt about the positive affects of TIF, such as Crain's columnist Greg Hinz, are still telling him it's time to "cut the bull" and come clean on the program. Considering the increasing attention being paid to Chicago's huge TIF problem, "sure we will" is no longer a sufficient answer.

Image used under a Creative Commons license by Flickr user marcmonaghan.

Another Example Of Illinois' Regressive Tax Policy

Angela Caputo — Fri, 30 Oct 2009 13:07:06 -0700

This week property tax bills hit mailboxes across Cook County and many property owners were justifiably outraged by their skyrocketing rates. Elected officials all tried to dodge responsibility for their role, including Mayor Daley, who certainly deserves his fair share of criticism (after all, his extensive tax increment financing system deprived local taking bodies of $552 million last year alone.) The mayor tried unsuccessfully to pass the buck to Assessor Jim Houlihan. Houlihan, in turn, pointed to House Speaker Michael Madigan (D-Chicago) for opposing an extension of the 7 percent tax cap, which sunset this year. But it's the SouthownStar's Phil Kadner who hits the nail on the head, noting that the state's regressive tax policy is the real culprit:

All Daley has to do to lower property tax bills in Chicago is to tell the school board (which he controls) to cut the school system's levy in half. He's not going to do that, of course [...]

Why hasn't that happened?

Because new tax money would have to be generated to replace the lost money from the property tax. The Legislature would have to increase the income tax, the state sales tax and maybe both.

Some folks would say that makes for a fairer system because those taxes are based on income, the amount of money people earn and on how much they spend.

As we've pointed out repeatedly, Illinois' regressive tax structure places a larger burden on low- and middle-income families. Because of the flat income tax rate, the lack of any sales tax on services, and the heavy reliance on property taxes and goods-based sales tax revenue, the lowest 20 percent of income earners face a higher tax burden than their counterparts in 45 other states.

The school system's over-reliance on property taxes only exacerbates the problem. Kadner points to families in Ford Heights, where the property-tax base is low and the median home price is $29,000. Homeowners in the south suburb (who are typically of modest-incomes) face a 20 percent tax rate this year, most of which will go to their severely underfunded local schools. Meanwhile, in the North Shore's Winnetka, where homes go for $900,000 on average, the property tax rate (5.5 percent), is significantly lower. "Poorer communities, mainly in the south suburbs, need to really sock it to their residents to pay for schools, police, and fire protection," Kadner writes. And when you stack the schools up, it becomes clear that despite having to dig deeper into their modest budgets, $7,466 less is spent on the typical high schooler in Ford Heights compared with Winnetka.

State Sen. James Meeks' (D-Chicago) HB 174 would addresses the need for both income and property tax reform and it would generate an additional $3 billion a year to finally adequately fund schools once the state budget is balanced. Illinois' taxpayers can't afford to keep waiting for this sort of fair tax reform.