A new report puts in clear terms how the Tax Increment Finance program, or TIF, strips away millions of dollars from traditional Chicago neighborhood attendance area schools, while financing pricey new selective enrollment and charter schools.
Released Tuesday by Stephanie Farmer, an assistant professor of sociology at Roosevelt University, the study first details how TIF siphons property tax dollars from local government bodies – read: the Chicago Public Schools – in order to promote economic development in specially designated TIF areas the city once deemed “blighted.”
Each year about $500 million – or ten percent of all Chicago property tax revenue – goes to TIF districts. If former Chicago Mayor Harold Washington hadn't created a TIF program back in 1983, a little more than half this TIF money would have gone to the Chicago Public Schools.
Part of the TIF budget, though, is directed towards building, expanding and rehabbing schools. Since 1983, about 46 percent of TIF money has gone to public works projects and about 47 percent of the public work money went to CPS construction projects.
As to how the CPS money is used, the report contends there is a “prioritization of schools with some form of an exclusive admissions policy.” About 69 percent of all CPS schools are neighborhood schools. But just 48 percent of TIF money went to neighborhood schools.
So a slim majority of TIF cash went to schools with at least a partly-exclusive enrollment system, i.e. charter and magnet schools, or one of the city’s nine prestigious selective enrollment schools where many students are tested in.
A few of these non-neighborhood schools are “Renaissance 2010” schools or charters that were part of the education agenda pursued by former Mayor Richard Daley and CPS head Arne Duncan, the current U.S. Secretary of Education. But a startling amount of money – 24 percent of all TIF CPS funds – has gone to these nine selective enrollment schools even though they make up just one percent of all CPS schools.
For example, Jones Academy High School in the South Loop – a neighborhood that long ago transitioned from blighted to gentrified to booming – netted $67 million in TIF funds for a new campus. Walton Payton College Prep – in the Old Town neighborhood – got $11 million for improvements. Payton was ranked the best high school in the state in 2009.
There are a couple of issues here. One is that city leadership, particularly former Mayor Daley, consciously used TIFs to push an education agenda that de-emphasized neighborhood schools, in favor of various specialty schools, including charters and selective enrollment.
As Progress Illinois has reported, this is the critical point of contention for many community groups and Local School Councils across the city – the very groups that formed an alliance with the Chicago Teachers Union against CPS policies like school closings.
The other issue, though, is that the TIF program has simply not worked as intended. Neighborhoods where property tax revenue skyrocketed in the Daley era, like the South Loop, reaped a TIF bonanza. TIF districts where property values and taxes remain very low, like a TIF in the predominantly black and low-income West Englewood neighborhood, have not.
“A circular logic prevails in that the presence of development attracts more development, while the lack of development goes on to justify continued lack of development,” Farmer concludes. “It is precisely this problem that the TIF was originally intended to mitigate.”