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Tax Increment Financing
Quick Hit
by Adam Doster
Fri Dec 3, 2010

A Cubs TIF?

It's been a rough week for the Chicago Cubs. Last night, legendary third basemen and broadcaster Ron Santo passed away at 70 due to complications from bladder cancer. The team missed out on free agent Adam Dunn, a left-handed slugger who decided to bring his talents (.902 career OPS) to the South Side instead. And down in Springfield, a plan proposed by the team's ownership to fix up Wrigley Field using public dollars was met with stony silence from state legislators.

The initial deal devised by the Ricketts family was problematic, to say the least. The family essentially asked to use 35 years worth of growth in amusement tax revenue (that would otherwise flow into the coffers of the city and county budget offices) to finance a $200 to $300 million face lift for Wrigley Field. The optics were terrible; with local budgets bleeding badly, rich, anti-government conservatives asked for a handout just so they could save about $37 million in interest costs. Plus, the math underlying the legislation was questionable, at best.

Folks in the capitol say the plan could come back up for a vote when lawmakers reconvene in early January. At City Hall, officials are also considering several other alternatives to help out the Lovable Losers. One would involve extending the boundaries in which "downtown" restaurants charge a 1 percent tax on meals. (The current district stops eight blocks south of Wrigley.) Other sources tell the two daily papers that there's also talk of creating a new tax increment financing (TIF) district around the ballpark. Here's a map of Lakeview, layered with the city's existing TIF districts:

The neighborhood is practically devoid of any TIFs, which is relatively rare. Can one plausibly argue, though, that Wrigleyville is in danger of falling into blight without a handout? The odds of the Cubs winning the World Series next year are better.

PI Original
by Micah Maidenberg
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
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
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
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
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
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
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.