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Tax Increment Financing
PI Original
by Micah Maidenberg
6:16pm
Tue Nov 23, 2010

Orr: No More "Secretive Slush Fund"

The city of Chicago's TIF districts collected $520 million in 2009, the second highest annual haul on record, according to Cook County Clerk David Orr. Now Orr is calling for a minimum six-month moratorium on new TIF districts, saying they remain opaque.

Quick Hit
by Micah Maidenberg
12:48pm
Thu Nov 18, 2010

TIF Projects, Contingency, And Mayoral Power

In recent weeks, we've been tracking how outgoing Chicago Mayor Richard Daley's now-ratified decision to declare $180 million of the city's tax increment financing dollars as surplus is affecting other local public agencies that depend on property tax dollars. Each will receive a windfall relative to their share of the county property tax allocation, available here. Chicago Public Schools will get about $90 million back, the city will use $38.5 million in surplus TIF dollars to help fund its operations in 2011, and the Chicago Park District will suddenly have an additional $12 million.

Of course, the park district gets other TIF grants, and defenders of the TIF program would surely point to this money as a reason why the program works in its current form. The park district's budget summary for 2011 (PDF) says its board was "successful in capturing" more than $40 million in TIF funds in 2009 and "sucessfully lobbied the City Council" for $65 million in TIF funding for capital projects during 2010.

But what's notable about the quoted phrases above is the contigency they express. Parks staff must capture and lobby TIF dollars; that effort may be succesful or not. One thing is for certain: when taxing bodies like the park district are forced to engage in this kind of give and take with the mayor's office and city council, power flows to them, and mostly to the mayor's office. Taxing bodies like CPS and the park district need to decide whether they would be better off controlling more of the annual property tax collection directly.

Quick Hit
by Micah Maidenberg
3:00pm
Fri Nov 12, 2010

School Districts Versus Cities On TIF Policy

How will Chicago Public Schools close the daunting $700 million budget shortfall projected for next school year?

Resolution of the budget crisis in Springfield certainly would help; state government owes CPS a total of $370 million for the last and current school year. Another source of dollars administrators could seek to tap: the city's tax increment financing (TIF) districts. Recall that CPS will gain around $90 million out of the $180 million in TIF funds that lame duck Chicago Mayor Richard Daley is proposing to use as surplus in his FY 2011 budget. CPS is getting a fraction of what it could, however. Even after this year's surplus declaration, an estimated $520 million in TIF reserves will remain untouched.

It would be rational for top leaders at CPS and members of the Board of Education to pound the table and demand property taxes stashed away in TIF accounts. The Board of Education has the most to lose by the proliferation of TIF districts in Chicago, which freeze the amount of property taxes the board can cull from those districts. Elsewhere, school districts often serve as a check on municipal governments' appetite for tax increment financing. Not so in Chicago. UIC professor Rachel Weber talked about this dynamic at a TIF panel discussion earlier this fall. Here's a clip:

A variation of this fight is happening out in Oak Park. The situation has its own specific history and legal background but it does provide a recent example of a school district pushing back against a municipality's TIF policy. Leaders of Oak Park-River Forest High School sued the Village of Oak Park earlier this year for allegedly violating an earlier deal that allowed the village's downtown TIF to be extended an additional 12 years. In exchange, the Wednesday Journal reported this spring, "village hall was to 'carve out' properties in Oak Park's downtown tax increment financing district ... and funnel money back to other taxing bodies. But that hasn't been done, the high school alleges." Maybe it's time for the Board of Education and CPS to have a chat with their counterparts out in Oak Park ...

PI Original
by Micah Maidenberg
2:57pm
Mon Nov 8, 2010

A Dent In Daley's TIF Program

The weak economy and the city of Chicago's dire fiscal situation has put a dent in Daley's tax increment financing system. We look at where the TIF "surplus" funds are coming from and ask if the lame duck mayor is doing enough.

Quick Hit
by Micah Maidenberg
4:04pm
Fri Nov 5, 2010

Sweet Home's Next Steps

There was no vote on the Sweet Home Chicago Ordinance at City Council on Wednesday, but proponents of the legislation say they've got multiple options at their disposal to get the bill -- or an alternative version of it -- finally passed. Sweet Home, as originally written, would mandate that the city designate a minimum of 20 percent of the tax increment financing dollars collected in Chicago on an annual basis for affordable housing projects, including revitalizing foreclosed homes. We've tracked the fight for the bill and its status in council extensively over the last few months.

Faced with a delay that had stretched to well more than a year, Ald. Walter Burnett (27th Ward), the legislation's chief sponsor, threatened to use a rare parliamentary maneuver called motion to discharge to force the full City Council to take an up or down vote on the bill at the November 3 council meeting. But Burnett said at the "ninth hour" Alds. Ray Suarez (31st Ward) and Ed Burke (14th Ward) approached him with a deal: drop the motion to discharge and prior to November 17 we'll allow a committee hearing and, crucially, vote on the original ordinance or a compromise bill that's still being drafted. Burnett said after conferring with Sweet Home supporters, he agreed to the plan. Suarez and Burke chair the housing and finance committees, respectively. There's been one hearing about Sweet Home, but no vote on it.

Julie Dworkin, policy director for the Chicago Coalition for the Homeless, said the Sweet Home coalition agreed to put off the motion to discharge vote for practical reasons. It's preferable to go through the regular legislative process, she said, "because certain aldermen who support the ordinance do not support using the motion to discharge because they don't like to be so in your face to the committee chairs." Dworkin is also confident that Sweet Home would make it out of a joint housing-finance committee hearing. She pointed out that Sweet Home backers still can use the motion to discharge, as there are two council meetings remaining this month, for the original ordinance if they do not support the alternative. The exact contours of that bill -- whether it preserves the basic idea of Sweet Home or overly waters it down -- could determine whether Ald. Burnett forces a showdown in the full council on an important, yet long-stalled bill.

Burnett, who's long been close with outgoing Mayor Richard Daley's administration, acknowledged he was frustrated with the delays that have kept Sweet Home stalled. "Personally, I think it's the mayor holding it up," he said. The end game for this legislation, however, finally appears to be at hand.

Quick Hit
by Adam Doster
11:52am
Thu Oct 28, 2010

Will Sweet Home Chicago Finally Move?

The Heartland Alliance passed along an interesting nugget about Chicago housing policy yesterday. According to their post, Ald. Walter Burnett (27th Ward) is planning a procedural trick to pry his Sweet Home Chicago ordinance out of the Joint Committee on Finance/Housing and Real Estate, where it's been stalled since the summer. The ordinance, if you'll recall, would set aside 20 percent of tax increment financing (TIF) dollars collected each year to fund new and rehabbed affordable housing developments. On November 3, the next full council meeting, Burnett is expected call a "motion to discharge" the bill. What's that mean? Here's the relevant description of the motion, per the City Council's rules (PDF):

Whenever any referred matter shall not have been reported back to the City Council by the committee to which referred, within a period of sixty (60) days, any Alderman may move to discharge the committee from further consideration of that matter. The motion to discharge shall be made under the order of “Miscellaneous Business”, and shall require the affirmative vote of a majority of all the Aldermen entitled by law to be elected.

The maneuver is rarely invoked in the council chambers; when Ald. Tom Tunney (44th Ward) used it to rescind the ban on foie gras two years ago, Ald. Joe Moore (49th Ward) said he hadn't seen an aldermen rely on it during his entire tenure in office. The coalition currently lists 26 co-sponsors on its website, which is the bare minimum that would be needed to toss the ordinance to the full council for a vote. Stay tuned. On November 3, there could be some fireworks down at City Hall.

PI Original
by Adam Doster
1:55pm
Wed Oct 27, 2010

Property Taxes, The Assessor, And You (VIDEO)

The heated campaign for Cook County Assessor reveals why both ethics and tax reforms are needed to reduce the property tax burden in Chicagoland.

Quick Hit
by Micah Maidenberg
3:59pm
Tue Oct 12, 2010

Rahm Nods At TIF Transparency

Chicago mayoral hopeful Rahm Emanuel actually discussed municipal policy today, telling the Sun-Times he'll support listing on property tax bills the proportion of tax dollars flowing into the city's tax increment financing (TIF) funds. While property taxpayers who live in a TIF district may currently click over to Cook County Clerk David Orr's website to see how much of their taxes flow into the TIF pot, the data is listed as $0.00 on the actual tax bills themselves. U.S. Rep. Mike Quigley took issue with that misleading bit of accounting in a column for Progress Illinois published about two years ago, when he still sat on the Cook County Board of Commissioners.

Take Mayor Richard Daley's tax bill. We found that Daley, who has tightly controlled the city's TIF program, paid more than 90 percent of his property tax bill in the Near South TIF District, a pool of money under his control.

Emanuel, who recently discussed his campaign with Quigley, also said more data about the TIF program needed to go online. For a detailed critique of the city's first attempt at TIF transparency, check out Max Brooks and Dan X. O'Neil's review of the TIF Sunshine Ordinance's implementation.