The Chicago City Council's Progressive Reform Caucus introduced a "Back to Basics" tax increment financing (TIF) ordinance on Tuesday.
The aldermen say TIF money should only be used on redevelopment projects for which the "developer can prove the site is blighted, vacant and/or obsolete, and that it passes the 'but-for' test," meaning the project would not happen "but for" the TIF subsidy.
"We're calling this the 'Back to Basics TIF ordinance' because it does just that -- gets the city back to the original intended purpose of tax increment financing in redevelopment projects," progressive caucus member Ald. Ricardo Munoz (22nd) said in a statement. "TIF should serve only as a critical driver for development in areas where it's needed. Where a project can't pass these tests, TIF simply shouldn't be used."
TIF is an economic development tool that depends on property tax dollars.
Through the program, a portion of property tax dollars gets extracted from those living within TIF districts in areas deemed economically blighted. In return, TIF money is used for redevelopment projects inside the TIF districts.
Critics of Chicago's TIF program take issue with well-off corporations getting large TIF subsidies. They also say too much money is concentrated downtown instead of in truly blighted areas, and there is little transparency in how the money is used.
"For too long, TIF has been used as a pot of funds to line the pockets of developers and big corporations on projects in neighborhoods that need it the least," added Ald. Leslie Hairston (5th). "With this ordinance, we'll rein that in and make sure tax dollars are being spent responsibly and where they're needed."