My goodness, the TIF districts are out of control in Chicago and now suburban mayor’s are smoking this politicial crackpipe. Please read this from the Chicago Tribune: EDITORIAL
Another form of TIF abuse
Published April 30, 2007
The great thing about tax increment financing, we often hear, is that money generated in those magical new taxing districts stays in the districts, promoting development close to home. But some Chicago aldermen have been chagrined recently to learn that it’s perfectly legal for the city to move money from one TIF district to another, as long as the districts touch each other.
It’s called “porting,” and it’s explained in a 49-page primer on TIFs being circulated by Cook County Commissioner Mike Quigley. The report — produced by Quigley’s staff and reviewed by urban policy experts at DePaul University, Loyola University and the University of Illinois at Chicago — spells out the impact of the city’s ever-expanding TIF empire. It provides real numbers to back up Quigley’s assertion that Chicago’s TIFs are siphoning money from other local governments — and driving up property tax bills.
TIFs are a moneymaking machine for the city. Once a district is established, the property taxes collected by the local governments that overlap the district — the county, forest preserve, schools, parks — are frozen for 23 years. New taxes generated by rising property values are reinvested to promote development within the TIF. The other local governments see no increase until the TIF expires, at which time they share in the increased tax revenues generated by higher property values. The idea is to promote development in economically distressed areas.
TIFs are just the thing to rescue seemingly hopeless pockets of neighborhood blight, and that accounts for their popularity among Chicago’s aldermen. But some of those aldermen are having second thoughts, and porting is why.
Like the TIF districts themselves, porting isn’t inherently parasitic. But the City of Chicago’s creative application of the law creates a ripe environment for abuse. By papering Chicago with TIFs, even in areas that are not blighted, the city has gained unfettered control over hundreds of millions of dollars in property taxes. TIFs now cover one third of the city.
“In order to allow for more flexible use of TIF money, the city has gerrymandered TIFs in such a way that all but a handful now border at least one other TIF, suggesting that the borders are being drawn expressly to allow one TIF to take money from another,” the report says.
Some aldermen are learning that the hard way. Until now, they’ve been happy to rubber-stamp one another’s TIF proposals, quid pro quo. But that was before money started leaking from one district to another. Though it’s no secret that Daley plans to finance his $1 billion Modern Schools Across Chicago project largely through TIF revenues, aldermen didn’t realize that could mean moving tens of millions of dollars from their wards to build schools elsewhere. Ald. Gene Schulter (47th), no big fan of TIFs in the first place, supported one in his ward after holding a series of public meetings to discuss how his constituents would like to spend the new money — only to learn that Daley is counting on $50 million of that money for schools outside the 47th. That’s not just porting, it’s raiding.
Although it doesn’t go so far as to recommend a ban on porting, Quigley’s report concludes there should be limits on how much can be ported, and how far.
Quigley has been a lonely voice for TIF reform — the Cook County Board is unconscionably uninterested in reclaiming hundreds of millions it is losing to the Chicago TIFs — so the grumbling in the wards is a welcome sign. When aldermen realize the money grown at home isn’t staying at home, they might do something about it.
From Chicago Tribune Today: Correction Ben Joravsky has been beating this drum for a long time. Chicago Newspapers must look into TIFs and expose them. Patrick McDonough