Hand over TIF surplus cash to Chicago schools
Editorials August 2, 2013 6:28PM
Updated: September 5, 2013 6:47AM
It’s hard to get your head around the mayor’s opposition to turning over surplus cash from the city’s tax-increment financing districts, however small an amount that may be, to the cash-starved Chicago Public Schools.
The mayor last week said the schools can’t “TIF their way out of this problem.” What’s worse, he and his staff say, forking over surplus TIF money to the schools would distract from the real solution — persuading state lawmakers to cut teacher pensions.
We strongly agree that pension reform is the top priority, but we’re also on board with declaring a TIF surplus for the schools now.
We don’t see a contradiction there. In fact, we see an easy win for the mayor. TIF cash is the only way to generate money for CPS now, even if it’s not much. Parents want some relief and the mayor can make some friends (or quiet some enemies) if he consents.
And he can frame it just that way, as a drop in the bucket to rehire an art teacher or two.
The city estimates a surplus of only $10 million for CPS, but it could be more if Emanuel presses for the largest surplus possible.
The starting point is the assertion that all but $180 million of the $1.71 billion in the city’s TIF pool already is committed to paying off old projects or finance new ones, according to the city’s preliminary budget released last week. TIFs are special districts where taxes from the growth in property values are set aside for 23 years to be used for economic development and public projects. Any surplus is supposed to be returned to the city’s taxing districts, the largest of which is the schools.
The city expects to cut that $180 million down substantially before setting a surplus amount. Because property values have dropped in some TIFs, the city anticipates needing surplus from healthy TIFs to pay debts already incurred in struggling TIFs. Plus, the city historically allows only 20 percent of uncommitted cash to count as surplus. City Budget Director Alex Holt told us last week that 20 percent was “probably the starting point” this year.
Good, let’s see if that can go higher. The city also could make clear whether it can cancel any projects still in the conceptual stage that are counted in the $1.53 billion pool it says already is spoken for, potentially creating a larger surplus. Top of the list for inspection should be the $55 million for the recently approved DePaul arena for McCormick Place. Some $7 million of that is counted in the $1.53 billion, city officials say. The rest will come from future TIF revenue.
Holt tells us there are few projects only on the drawing board. Fair enough, but the city owes it to children losing teachers to dig as deep into that TIF pot as humanly possible.
The latest reports on CPS budget cuts are deeply discouraging. School officials say they are cutting $68 million from school-based instructional budgets, but that’s just a portion of what schools spend. A look at their total budgets by the group Raise Your Hand yields a total loss of $164 million for neighborhood schools. A RYH parent, a political scientist by training, derived that number by excluding charter and contract schools and looking at gains and losses only in traditional schools. This reduction includes losses due to funding formulas that CPS does not control and to changes in enrollment at individual schools.
RYH says 92 schools lost an art teacher, 54 lost a music position, 58 lost a gym teacher and 40 lost a librarian. CPS reports fewer art and gym teacher losses, 61 and 33 respectively, and noted that about 60 percent of laid-off teachers find work elsewhere in CPS. The school system also told us of other teacher losses: 125 in special education, 47 in language arts and 72 bilingual teachers because of state cuts to bilingual.
Late on Friday, CPS also announced the layoff of another 200 lunchroom workers.
Mayor Emanuel owes it to Chicago’s children to do what they can now, however small, to try to reverse some of these losses.