The seven downtown Chicago tax increment financing (TIF) districts that Mayor Rahm Emanuel plans to phase out have together collected $869 million in revenue since their inception, according to figures provided by Cook County Clerk David Orr.
Just in the last year, the seven TIF districts had combined revenues of $93 million.
Those numbers were contained in Orr's 2014 TIF report released Monday, the same day news broke that the city will be shutting down seven downtown TIF districts after current project balances have been paid in full. As part of Emanuel's TIF changes -- which were announced as both the city and school district grapple with large pension and budgetary issues -- no new spending in the seven TIF districts will occur.
The Chicago Public Schools (CPS) is expected to get $125 million in revenue over five years under the plan to shutter the TIF districts, and the city will receive $50 million. Other funds will be set aside for "emergency infrastructure projects."
"Chicago and the mayor are moving in the right direction by freezing new spending at some downtown TIFs and dissolving those TIFs when current projects have ended," Orr said in a press release. "Still, such scrubbing is overdue and it could certainly include more than seven of 148 TIFs."
The city's TIF piggybank, meanwhile, took a hit last year.
Chicago's 148 active TIF districts collected $372 million in total revenue during the 2014 tax year, according to Orr's report. That's down 12 percent compared to 2013, when TIF revenue was $422 million. Annual Chicago TIF revenue has not been this low since 2004.
On the other hand, revenue captured by the 286 active TIF districts in suburban Cook County increased 4 percent in 2014, according to Orr's office. The suburban Cook County districts collected a combined $272 million in revenue last year, up from $261 million in 2013.
Chicago's TIF revenue drop was due mostly to last year's expiration of the Near South TIF district, which covered downtown areas plus the South Loop. The Near South TIF district was one of eight Chicago TIF districts that either expired or got terminated last year.
In its 23-year history, the Near South TIF district generated more than $637 million in revenue, including $65 million in 2013 alone.
"It's good to see big downtown TIFs ending and know more will be dissolved soon," Orr added. "But that doesn't mean we don't need thorough reviews of how billions were spent in the Loop. For example, nearly $638 million was generated in the Near South TIF and we still don't have a comprehensive, easy-to-understand audit of how that money was spent, project by project, contractor by contractor, dollar by dollar."
Under Chicago's controversial TIF program, which began in 1986 and was greatly expanded by former mayor Richard M. Daley, the city sets up special taxing districts in areas that are considered blighted. TIF critics, however, say the term blighted has been used too loosely, as TIF districts have been created in the city's downtown area.
For those living in a TIF district, a portion of their property tax dollars gets diverted from local units of government, including the school district. The money is instead funneled into the TIF district's fund. The amount that property owners pay into their TIF district varies because it is based on the difference between what they currently pay in taxes and what they paid when the TIF district was first created. TIF districts typically have a life cycle of 23 years.
In return, companies receive public subsidies for economic development projects, like a shopping center, that will supposedly generate future property taxes inside the TIF districts. TIF money has also been used for school building construction and other public-sector and non-profit projects.
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.
Since its inception through 2014, the city's TIF program has collected $6.3 billion in tax revenue, Orr's report showed.
While eight Chicago TIF districts expired or shut down early last year, the city did add four new TIF districts in 2014. One of them, the Washington Park TIF district, is located near the University of Chicago and could be used for developments tied to the Barack Obama Presidential Library.
Orr's office also examined the Chicago TIF districts slated to expire between 2015 and 2024 as part of a "10-year TIF projection" for the city. The first-of-its-kind analysis showed that 71 Chicago TIF districts, including the seven being targeted by the Emanuel administration for termination, are slated to expire over the 10-year period. Based on conservative estimates, that will free up a projected $296 million over the decade, including $160 million that could go to CPS. The city of Chicago and other taxing bodies stand to collect the remaining $136 million.