Over the past year, we’ve written extensively about the serious lack of oversight in Chicago’s tax increment financing (TIF) system. We’ve noted that, while TIF was devised as an economic development tool for blighted communities, Mayor Daley began ignoring that original purpose long ago in order to create new TIF districts in affluent neighborhoods and throughout Chicago’s downtown. The property tax revenue diverted to these TIF accounts has created a virtual slush fund for his favored developments and other pet projects, while local taxing bodies (schools, libraries, etc.) have been left starving.

Now the mayor has even found a way to spend the revenue left over in these accounts after a TIF district expires.

The Central Loop district—located in the heart of downtown—is considered the granddaddy of the TIF system. Created in 1984, it siphoned off over $500 million in property tax revenue during its 24-year lifespan. But last fall, after hinting that that he might try to extend it for an additional 15 years, Daley announced that he planned to let it expire.

We recently decided to take a look at the city’s final balance sheet (PDF, page 12) for the Central Loop district, to see how the project fared. It turns out that a $116 million surplus remains.

That might seem like good news for the cash-strapped taxing bodies that have for two decades been deprived of new revenue within the district. But it turns out they won’t see a dime of the money, which has instead been slated for “future redevelopment project costs” (a.k.a. whatever Daley sees fit).

Here lies another example of how the public is sold a bill of goods on Chicago’s shadowy TIF program. While intended to fuel redevelopment on a project-by-project basis, the squirreling away of the Central Loop surplus demonstrates how City Hall regularly ignores the spirit of the statute.

Talking to us last week, Cook County Commissioner Mike Quigley’s policy director Jason Liechty put it this way: “It’s no longer money to fund projects, it’s money searching for a project.”

The Central Loop district represents just one of more than 160 TIF accounts citywide that will swell with billions in tax revenues over the next two decades. Meanwhile, if and when any of these accounts expire with unused funds left over, the mayor can apparently cash in.

The solution? “We have to give City Hall a strategy for distributing that money,” long-time TIF reform activist John Paul Jones told us. “That’s going to have to come locally.”

It’s worth noting that opposition to the free-wheeling TIF system has been stirring. Alds. Manny Flores and Scott Waguespack are expected to introduce a TIF reform proposal next month. And the willingness of folks in Oak Park to take on TIFs to put money back into their starved school district could serve as an example of how, with enough public pressure, business as usual can be changed.

Image of the Central Loop TIF district taken from the Windy Citizen's TIF map.