Progress Illinois

Open government advocates have long squawked about Mayor Daley's unchecked authority to keep billions worth of property tax revenue off the books and under his control through Tax Increment Financing (TIF).

For years, they've have called on aldermen not to sign off on new TIF districts, which now cover more than a quarter of the city's acreage. They cautioned that the ripple effect of TIF -- which freezes property tax rates for schools, parks and police for 23 years and diverts the money into shadow budgets -- might not be worth a new big-box store or Starbucks in the neighborhood.

They were ignored.

Well, timing is everything. Due to the city's a looming $469 million budget shortfall, more attention is gradually being paid to the huge chunk of property tax revenues -- $555 million in 2007 -- being whisked into TIF accounts.

Two-thirds of the city's property tax levy from last year was siphoned off by TIF districts, according to an annual report released by Cook County Clerk David Orr.

Aside from keeping the desperately needed money from public schools, critics like the Reader's Ben Joravsky have long cautioned that scant record-keeping and transparceny have facilitated a flawed system that could ultimately lead to big trouble. Yesterday, he addressed these concerns:

For all the property taxes the TIFs have collected, however, the painful irony is that they may not have collected enough. The 2007 total is up by 11 percent over the $500 million TIFs collected in 2006, according to Orr's report. But last year's hike was up 30 percent over 2005 -- thus the rate of increase has been cut by more than half.

That's because the TIF take is largely based on property values, which have recently been falling. If property values continue to fall in the TIF districts, the TIFs will collect even less money in the coming years. That's not necessarily bad -- personally, I wish the program would be shut down altogether until it's more efficiently and honestly run. But I suspect the city has overextended itself with the TIFs.

With the city leveraged to the hilt on developments like Millennium Park and Block 37, who's going to be on the hook for the debt repayment? Taxpayers, of course.

Cook County Commissioner Mike Quigley -- who recently described the city's TIF system as "government gone wild" -- has decried how most property owners remain in the dark about the share of their tax payments that's headed for the funds:

[W]hile TIF is listed on every [Cook County tax] bill alongside the agencies receiving property taxes, the line always reads $0.00. This is due to a quirk in the way the County Clerk has historically calculated tax rates. But as a consequence, the taxpaying public is misinformed.

State officials have since made recommendations for how to go about forcing the disclosure. But in the mean time, Orr says it's ironic that those officials who, for years, chose to look the other way are going to begin scrambling for the top secret information and asking the same questions they've done a good job of ignoring for years.  From Joravsky's post:

"The mayor is trying to make up a giant hole in the budget -- he wants to boot everything that walks," says Orr. "And the city is officially collecting from Chicago property taxpayers $555 million. Has the public had any real say in how it gets spent? Do they think it's spent wisely? These are important questions."