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Time for a tiff over TIFS

Cook County Clerk David Orr. | Rich Hein~Sun-Times

Cook County Clerk David Orr. | Rich Hein~Sun-Times

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Updated: July 27, 2013 2:15PM



It’s time for another serious look at the pros and cons of Tax Increment Financing in Chicago — a tiff over TIF — the controversial economic development program that’s supposed to revitalize struggling neighborhoods by offering financial incentives to potential investors.

The “sweeteners” come from property taxes that, to a large extent, might otherwise be spent on education, housing, parks, libraries, and public safety.

That’s defensible when there’s enough tax revenue to go around, but it’s problematic in lean times, like now, when Chicago is closing schools, firing teachers, reducing library hours and trying to fight violent crime with fewer police officers.

Another concern is that many TIF “districts” are in affluent areas, especially in and around downtown, which violates the intent of the state law that created the program in 1977 to revitalize “blighted” communities.

All of this came to mind recently when Cook County Clerk David Orr released his annual TIF report, reminding us that Chicago is still playing fast and loose with a program critics refer to pejoratively as “a slush fund masquerading as an economic development tool.”

That’s the cynical view of those who’ve watched Chicago mayors flout state law by using TIF money as a shadow budget for infrastructure and beautification projects anywhere in the city, regardless of economic need, without following standard disclosure and transparency requirements.

Orr says we’re also in the dark about how much of the $5.5 billion in property taxes collected for TIF over the years has been spent, what projects it’s funded, and how much cash is currently sitting in TIF accounts.

“Guesstimates” on the size of the surplus range from $450 million to $1.5 billion, and several aldermen are now echoing Orr’s suggestion that Mayor Emanuel send a large chunk of it to CPS, which is hundreds of millions in the red.

The argument is that scarce tax dollars shouldn’t be used to assist profitable enterprises when it could be alleviating some of the painful school cuts.

Exhibit A: Emanuel earmarking $55 million in TIF dollars to build a hotel and basketball arena near McCormick Place, while CPS is announcing more than 2,000 layoffs.

That doesn’t feel right.

Once upon a time, mayoral candidate Emanuel told the BGA that significant TIF reform was a high priority. In our mayoral questionnaire he supported a strict interpretation of “surplus” — a change that would mean the city no longer stockpiles cash while schools and neighborhoods languish.

So it’s time for Emanuel to keep his promise to call a surplus a surplus, and give local taxing bodies like CPS the cash state law says they’re entitled to.

We also need citywide reporting of TIF revenues and expenditures so we’ll have exact surplus figures, especially when the funds continue to accumulate in TIF districts that don’t need more investment incentives.

The mayor’s TIF task force recommended those reforms two years ago, and they’ve been supported since then by editorial boards, progressive public officials and reform groups.

So let’s have that spirited tiff over TIF policy asap.

And let’s ask Joe Ferguson, Chicago’s stellar Inspector General, to referee.

Andy Shaw is President & CEO of the Better Government Association. He can be reached at 312-386-9097 or ashaw@bettergov.org.



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