Last week, we documented how the Reader's stellar investigation into Mayor Daley's $1 billion "shadow budget" had reinvigorated the public debate around tax increment financing (TIF) -- just in time for the city's budget talks with aldermen. Over the weekend, FOX Chicago Sunday's Dane Placko picked up the ball, saying that "every Chicago taxpayer should read" the latest article by Ben Joravsky and Mick Dumke. With the city's financial problems coming to a head, Placko told viewers, "Imagine how this budget would look if we weren't dealing with this huge TIF problem." Considering that TIF siphoned $552 million off the tax rolls last year alone the possibilities are indeed vast. He then touched on an issue that we've written about extensively, noting that "a lot of the money is going to corporations to remodel buildings and such." Watch it:
PLACKO: In this week's article, the Reader outlines how the city maintains what is essentially a second budget, which it refuses to release. Even aldermen only get to see TIF information for their own wards. Not the big picture. And this is significant because the mayor controls a pot of TIF money that has grown to $1 billion, one-sixth the size of the entire budget. With so much money going to TIF, property taxes in non-TIF district have to go up to cover the money that's not going to the general revenue fund. Imagine how this budget would look if we weren't dealing with this huge TIF problem -- and a lot of the money going to corporations to remodel buildings and such.
"People have been getting upset about TIF for years," co-host Jack Conaty added, "I think it's going to peak here shortly."
Let's hope that the debate comes sooner rather than later. After all, with a little creative thinking, the city's $1 billion surplus could go a long way in solving this year's budget crisis. Before that can happen, however, the mayor is going to have to come clean on what TIF money is already committed. In a column on Friday, Crain's Greg Hinz urged the Daley administration to "cut the bull." "It's our money," Hinz wrote. "You clearly have a pretty good idea how you intend to spend it, so tell us." We couldn't agree more.
Comments
Valerie F. Leonard (not verified) on Mon, 10/26/2009 - 21:41
A review of the 7 TIFs impacting North Lawndale revealed the following:
• Redevelopment Project expenditures within TIF districts often exceed the 23-year redevelopment budget
• The Sterling Park development has or will receive $23,000,000 in TIF funding from the Homan-Arthington TIF, which has a $10,000,000 redevelopment budget.
• Cineplex Odeon/ICE Theaters (now closed) was awarded $3,300,000 in TIF assistance from the Roosevelt-Homan TIF, which has a redevelopment budget of $2,400,000.
• While there are allowances to transfer funds between TIFs (porting), there does not appear to be any provision to amend the TIF redevelopment budgets to reflect the current reality.
• The Collins High School gym was slated to be demolished for construction of an Olympic Velodrome in the event Chicago was successful in its bid to host the 2016 Olympics. The City invested $30.3 million in the school in 2006 for major capital improvements under the Modern Schools Across Chicago Program. As of 12/31/08 half of the funds have been spent. Collins graduated its last class June 2009, and the building is currently occupied by 2 charter schools, one of which has been placed on the highest level of negative sanctions due to poor performance.
• Data for 2006 suggest that for every dollar that goes towards financing and real estate development, only 3 cents benefit the local (North Lawndale) residents and business owners.
• One of the stated goals of a number of TIF redevelopment plans is to increase employment opportunities for the people who live in the impacted communities. While the City's budget indicates that the TIFs create jobs, neither the TIF annual reports nor the Department of Community Development provide any data on the number of African American residents in the impacted communities got jobs or contracts as a result of the TIFs. Moreover, current and pending legislation favors unionized labor on public works projects, and there is a push to expand the definition of public works projects to include TIF districts and Empowerment Zones. This measure would effectively lock African American construction workers and laborers out of opportunities to work on construction jobs in their own communities. There are no comprehensive workforce development programs, and construction workers only comprise 4% of North Lawndale's workforce.
• A number of HUD financed projects are in North Lawndale TIF areas. Developers receiving HUD financing must make a reasonable effort to hire low income residents and/or public housing residents in the area. The TIF reports do not give any indication that any residents of public housing, Section 8 recipients, or low income residents were hired on these construction projects.
• One of the commonly stated goals of the North Lawndale TIFs is to provide affordable housing. However, the housing that is planned for the Ogden Pulaski TIF area is affordable to families making between $60,000 and $90,000 per year. The median income for a family of 4 in North Lawndale is just under $21,000. They can afford rents of $450 and to purchase homes for $60,000.
• The City typically does not include programs such as the Neighborhood Investment Fund (NIF) and Small Business Improvement Fund (SBIF) in the redevelopment budgets, but routinely charges the TIF funds for these expenses.
• The City indicates that “Private Investment” could include other public funds that are not from the TIF fund. However, no disclosure is made as to what other public funds have been made available.
• The City and delegate agencies seem to only make appearances at meetings hosted by elected officials or its delegate agencies. This can be problematic in communities where the flow of information is inefficient. Moreover, this tends to politicize the process of providing information and access to services to which tax payers are entitled.
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