Is Mayor Daley acting a little defensive these days or what? During a Tuesday press conference, he took a jab at the aldermen who are opposing
his $35 million property tax rebate gimmick, adding: "So the
politicians are saying: increase your property taxes and increase ...
Is Mayor Daley acting a little defensive these days or what? During a Tuesday press conference, he took a jab at the aldermen who are opposing his $35 million property tax rebate gimmick, adding: "So the politicians are saying: increase your property taxes and increase your income tax. Unbelievable! It seems everybody wants to tax everybody now!" Watch it (full video here):
What the mayor fails to mention is that no one is more culpable in driving up property tax rates than himself. After all, taxpayers in Chicago are being forced to fork over more this year in no small part because of Daley's shadowy tax increment financing (TIF) system.
As Cook County Assessor James Houlihan's office pointed out in a report released last November, there is no discounting the connection between TIF and higher local property tax rates. In fact, if the districts were disbanded as of last fall, Houlihan's research staff concluded that Chicago taxpayers would have seen their bills fall by 11 percent. His report explains:
If the property value for all Chicago TIF districts had been included in the base for tax year 2006, the City composite tax rate would have been 11% lower. We can estimate this rate by returning all EAV currently allocated to TIF to the general tax base, and recalculating tax rates for all of the taxing agencies, and the composite of all of them. The rate in 2006 if all TIF EAV were returned to the base would have been 4.732%, whereas the actual 2006 rate was 5.302%. This means that individual tax bills would also have been 11% lower in 2006.
"Here's another way to look at it," the Reader's Ben Joravsky recently wrote. "On top of the money taxpayers are already sending to the city, schools, parks, and county, TIFs ensure they have to kick in another half a billion bucks a year. Mayor Daley gets the extra money while the other bodies do the taxing."
This year, the Chicago Board of Education is doing the heavy lifting, raising their tax levy by 5 percent. Incidentally, the Board is the taxing body most affected by the TIF system's siphoning off of public funds, as 50 percent of those tax dollars would otherwise go into their coffers. To illustrate the point, check out the graph below showing how property taxes are divvied up in Chicago.
To make matters worse, by padding his TIF accounts with the diverted tax money (which accounts for 50 cents on every dollar collected) and then requesting more state resources to cover the difference, Daley is forcing the cash-strapped state to direct more money at Chicago schools. Houlihan's report explains:
If, for example, the Central Loop TIF had expired in 2005 CPS would have been able to collect approximately $47,481,754 in additional property taxes. This amount is, however, only about 2.5% of their total property tax extension. In addition, General State Aid (GSA) allocated to CPS is affected by EAV and an estimated 70% of property taxes “lost” to TIF are compensated for by increased GSA.
For a perfect example of how much money is being diverted from the general revenue fund, look no further than Daley's own property tax bill, 90 percent of which goes to the Near South TIF district.