Taming TIFs
Efforts are under way to shed more light on $1.7 bil. in accounts, but program’s process often a mystery
TIFs have been called a slush fund, a description that’s in the eye of the beholder. But they are a mad money pot of off-the-books spending, controlled by the mayor of Chicago based on priorities that can be mysterious.
Tax increment financing is an off-putting name for an explosive political topic.
After coming to Chicago three decades ago as an obscure funding tool for North Loop development, TIF districts have multiplied across the city, raising enough cash to become a stealth government.
Mayor Rahm Emanuel on Sept. 18 pledged $17 million to expand the elite Walter Payton College Prep High School. In May he offered $55 million from TIF to build hotels and a DePaul University-anchored arena near McCormick Place.
In 2012, Chicago property owners paid $457 million into TIFs, nearly a dollar for every $10 that they shipped to taxing agencies. The amount is nearly as much as they paid to support Cook County government and the City Colleges of Chicago combined.
TIFs have been called a slush fund, a description that’s in the eye of the beholder. But they are a mad money pot of off-the-books spending, controlled by the mayor of Chicago based on priorities that can be mysterious.
They are supposed to remediate blight and keep communities from slipping further into trouble. But the richest TIFs historically have been in or near downtown, covering areas seldom thought of as blighted.
Many TIFs across town have achieved their goals. They have produced modernized factory districts, revitalized stores in neighborhoods that retailers had shunned and helped preserve historic buildings. But TIFs also have been used to subsidize private development or businesses that may or may not be credibly threatening to leave.
“The TIF program has gotten so far askew that it has lost its original purpose,” said Rep. Mike Quigley (D-Ill.), who as a Cook County Board member in 2007 produced a study that called for greater TIF accountability.
Nevertheless, Quigley said Emanuel “has made a tremendous amount of headway on transparency.” Earlier this month, the city released new documents for each of its 154 TIF districts that listed expected revenues and expenses through 2017, putting in one place information that was scattered.
TIF incentives are diverted property taxes, making them controversial. Any town can create a TIF district, drawing boundaries as it wants.
Officials compute the amount of property tax revenue that the district generates, and that becomes a baseline sum. Any revenue increase — the increment — from that point goes into the TIF, not to local governments that rely on property taxes.
Mayoral aides said Friday