A new analysis shows the city of Chicago's tax increment financing (TIF) program had about $1.36 billion in unspent funds at the start of 2016.
The TIF Illumination Project, a volunteer group spearheaded by longtime Chicago activist and civic educator Tom Tresser, and interns at In These Times reviewed the 2015 annual reports for each of the city's 146 TIF districts.
According to the review, the city had about $1.36 billion in unspent funds sitting in its collective TIF district bank accounts at the end of 2015. That's down from the $1.44 billion the city had in its TIF piggybank one year earlier.
"The Chicago budget director claims most of (the unspent TIF funds are) 'reserved for future development' or obligated to pay existing debt incurred by existing TIF projects," reads a statement from the TIF Illumination Project. "However, the response to our (Freedom of Information Act) requests proves that the money left over in Chicago's TIF accounts amount to a massive slush fund that can be used at the mayor's discretion."
TIF is an economic development program that depends on property tax dollars.
Under Chicago's TIF program, the city sets up special taxing districts in which a portion of property tax dollars gets diverted from local units of government, including the school district. The money is instead funneled into the TIF district's fund.
In return, companies receive public subsidies for economic development projects that will supposedly generate future property taxes inside the TIF districts. TIF money has also been used for school building construction and other public-sector and non-profit projects.
Chicago's TIF districts brought in over $353 million in property tax revenue in 2015, the TIF Illumination Project found. On the expenditure side, $336 million in TIF money was spent last year. That's down 47 percent, or about $302 million, from the TIF spending in 2014.
In addition, TIF surplus funds totaling about $40 million were "distributed to local government sources" last year, according to the review.