Updated: August 25, 2013 6:25AM
Hundreds of parents and teachers plan to descend on City Hall Wednesday, demanding that the city declare a surplus in its tax increment financing districts and to funnel that excess money to the school system.
A group of aldermen plans to introduce an ordinance to do just that at Wednesday’s City Council meeting.
Given the outrage over school budget cuts erupting in every corner of the city, this should be a no-brainer for the mayor and the rest of the Council.
It tells the public the mayor is on their side. It tells the public the City Council knows this crisis is for real.
But no one should kid themselves about the impact this will have on Chicago’s budget crisis. Declaring a TIF surplus is no match for the massive money troubles facing the Chicago school system.
The real, long-lasting solutions begin with reducing teachers’ pensions, to align them with what CPS can afford. The charts accompanying this editorial show just how deep in the hole CPS has dug itself. After that’s resolved — this summer isn’t soon enough — the talk must immediately turn to revenue, including such ideas as a dedicated tax levy for teacher pensions, temporarily lifting the property tax cap and a progressive income tax for the state.
Every dollar counts, of course, particularly if it’s your child’s art teacher that may be restored, which is why we support directing TIF money to the schools. TIFs are special districts where the growth in property values is set aside for 23 years to be used for economic development and public projects.
The city estimates a surplus this year (half of which goes to the schools) may yield only $10 million for CPS, but it could be larger. It all depends on how carefully the city scrubs each TIF — determining how many dollars are already spoken for and how many aren’t — and what percentage is counted as surplus. The city currently uses 20 percent. The city must be prudent, property values have declined and it needs cash to pay off its TIF debts. But with the schools in crisis, now is not the time for extreme caution.
The city could also close TIFs before they expire if they’ve fulfilled their purpose and turn over the remaining cash to the schools, an idea Cook County Clerk David Orr has been promoting.
Finally, we also don’t buy the city’s argument that it’s too early to declare a surplus. They want to wait until after August or September, when the Aug. 1 property tax bills are all collected and counted. But collection rates don’t vary much from year to year. They can easily estimate now what they’re likely to take in.
Declaring a TIF surplus won’t solve CPS’ budget crisis, far from it. But it’s all the city has at its disposal today, right now.