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TIF taxing districts to be more ‘efficient,’ ‘accountable’ — and still here

Updated: November 20, 2011 2:21AM

Tax increment financing, the economic development tool Rich Daley used to siphon hundreds of millions of property tax dollars away from local taxing bodies to redistribute to developers, corporate subsidies and pet projects, is going to be different under Mayor Rahm Emanuel, we were assured Monday.

Under Emanuel, the controversial program known as TIF will be more “efficient,” we were told. It will also be more “accountable,” we were promised. And naturally, as everything is supposed to be in this era of see-thru government, it will be more “transparent.”

What it won’t be is gone, as some of its most ardent critics had hoped, nor will there be a rush to shut down any of the more questionable TIF districts and restore the normal flow of tax dollars to the Board of Education, Park District or the city’s corporate coffers (although they might eventually get around to trimming some of them.)

Instead, the large sums generated for the city from TIF districts — about $500 million this year — will continue to be available to the new mayor to drive his own economic development agenda, just as for Daley.

Even as Emanuel emphasized to reporters Monday that — unlike Daley — the TIF program will be “only one of the tools” at his disposal, the cover letter for the report from his TIF Reform Task Force made clear that TIF subsidies will continue to be a point of emphasis in his efforts to fuel construction and lure jobs.

“The importance of tax increment financing today is clear; tomorrow it will be the essential tool, as job deficits linger and federal and state resources are continually scaled back,” wrote Carole Brown, the former CTA chairman under Daley who chaired the TIF panel.

The difference, as envisioned in a report Emanuel pledged to adopt, will be a more stringent process in deciding when to create a TIF district and how the money gets used.

This will be enabled by lots of new planning efforts and by developing “metrics” to measure whether the TIF districts and particular projects are meeting their goals.

It was clear after hearing from Emanuel and some of the TIF reform panel members that no serious consideration was given to shutting down the program.

Congressman Mike Quigley, an outspoken critic of the city’s TIF program while he served as a Cook County commissioner, promptly issued a statement praising Emanuel for “aggressively taking on what has been a black hole of city finances for too many years.”

“Shining a light on how we spend TIF money and requiring transparency and accountability is a tremendous leap forward for taxpayers,” Quigley said.

Civic Federation President Laurence Msall, a member of the task force and someone else who has been critical of the TIF program in the past, also assured reporters that the panel’s recommendations will bring an “enormous improvement” by making it more difficult to create new TIF districts and by establishing a five-year review process for weeding out underperforming TIFs.

I’m less convinced this will be a big change, though the proof will be in the pudding.

While I agree that good process leads to better outcomes in government, I’m also aware that the best process can be manipulated to serve the desired ends.

In other words, if Emanuel decides it would be desirable to get TIF money to a developer or company for a specific project, his staff is going to be able to find a way to make it happen, just as surely as Daley did, no matter what systems there are in place.

The same goes for eliminating TIF districts. The most questionable TIF districts, in my view, are the ones located in and around the downtown business district, which capitalized on the real estate boom of the prior two decades. I think most of what we see would have been built without city subsidies, but of course, we’ll never know. That’s the beauty of TIF.

Unfortunately, some of the most underperforming TIF districts are in impoverished areas where you’d most want to see it succeed.

Emanuel made Monday’s announcement at the beautifully restored and TIF-subsidized Hairpin Lofts building at the corner of Diversey and Milwaukee in Logan Square, the kind of neighborhood project for which many would argue TIF was intended as opposed to the LaSalle Street TIF district.

Chicago now has 165 TIF districts encompassing 10 percent of the city’s property tax base and 30 percent of its geographic area.

That’s one reason I’m not as impressed about Emanuel slowing the growth of TIFs. There aren’t many places left to put them.

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