He may be on his way out of the General Assembly, but State Rep. John Fritchey is making moves on an issue near and dear to our hearts: Mayor Daley's tax increment financing (TIF) empire.  Since the spring, we've been following the emergence of the Raise Your Hand Coalition (RYHC), a group of Chicago Public Schools parents demanding that Daley use his vast TIF network to alleviate the CPS budget crisis.  A few months ago, the coalition found a legislative ally in Fritchey.  And yesterday, flanked by RYHC's Jonathan Goldman and the Chicago Teachers Union's Xian Barrett, he rolled out an ambitious package of proposals aimed at taking hundreds of thousands of dollars out of Daley's "piggy bank" and returning them to the cash-strapped local school system.

(If you're new to the issue and don't know how TIF districts work, check out Ted Biondo's primer on the redevelopment tool and the Reader's examination of how Daley uses and abuses it.)

Fritchey's first proposal is to change the TIF statute to require that any unspent funds be returned to local taxing bodies, thereby making it impossible for the mayor to build up a $1 billion surplus like the one he is sitting on today. From a press release:

Rep. Fritchey is introducing legislation that would require, (instead of just permitting as the current law does), that all TIF funds not specifically appropriated for projects be returned each year so that they may be redirected to the taxing bodies on a pro rata basis. 

We've repeatedly noted that the surplus is not untouchable (as Daley would like everyone to believe).  In fact, both Orland Park and Chicago Heights have returned unused TIF funds to local taxing bodies before the districts in question had expired.  (At the end of this post, we examine new research estimating how much money the TIF surplus could return to Chicago schools.)

In his write-up, Gapers Block's Ramsin Canon summarizes the effect of this proposal:

From a policy standpoint, it would keep potentially millions of dollars in the CPS budget that would otherwise go into funds controlled by the City's executive (ie, the Mayor). From a political standpoint, it would rob the program of its power to keep aldermen at heel for funds they need and restore some budgeting independence to the Board of Education (and end the annual doomsday scenarios the CPS faces).

Back in June, Fritchey and the RYHC told us that they were researching whether it was possible to exempt the Chicago Board of Education from TIF's reach (over 50 percent of Chicago TIF dollars currently come out of the the Board's share of property tax revenue).  Having determined that this wasn't possible, Fritchey is instead proposing to exempt the schools from any new TIF districts formed in the future:

While it is not possible to change the funding structure for existing TIFs, Rep. Fritchey is introducing legislation that would eliminate the schools from being included in any yet to be created TIF districts.

Finally, Fritchey is filing legislation "directing the State Auditor General to perform a comprehensive compliance audit of the City’s existing TIF districts," noting that a sample audit conducted by the Chicago inspector general in April accused the Daley adminstration of lax oversight.

In conjunction with the Fritchey announcement yesterday, RYHC launched its "Give Back TIF" letter-writing campaign yesterday (which you can participate in here).  Meanwhile, Canon zeroes in on the practical question stemming from Fritchey's legislation:

These reforms represent the first serious effort to change the TIF statute at the state level in years. However, one question comes immediately to mind: given that Fritchey will be leaving the state house one way or another come the end of the year, will these bills have a legislator champion in Springfield? Via statement, Fritchey addressed that concern:

"I am certain that there will be no shortage of legislators willing to stand up and fight on behalf of taxpayers to make sure that they are getting the most for their hard-earned money....And in one capacity or another, I intend to be right there with them."

Are there any other Chicago legislators willing to stand with Fritchey on this issue?  It's something we're going to be looking into in the coming weeks, so stay tuned.

New Research On The 2009 Surplus

In the meantime, on behalf of SEIU Illinois (which sponsors this website), researchers Robert Ginsburg, Ph.D. and Don Wiener, Ph.D. collected the 2009 annual reports for each of Chicago's 161 TIF districts and found that they diverted $474 million from local taxing bodies last year and ended the year over $1 billion in surplus funds (which is consistent with what Deloitte & Touche found). You can view their full spreadsheet here.

Ginsburg and Wiener also attempted to estimate how much of that surplus could be returned to local taxing bodies without affecting the current level of TIF spending.  As the spreadsheet below shows, they found that $866 million is available for return, which would mean $463 million for the Chicago schools, $181 million for the city, and $77 million for Cook County.