TIFs An Issue In Chicago Mayoral Race

It appears Mayor Greg Ballard's chicanery with downtown TIF districts is straight out of Chicago Mayor Richard Daley's playbook. With hundreds of millions of tax dollars being diverted to Chicago's TIF districts in booming downtown areas, some politicians are calling for greater transparency, including mayoral hopeful Rahm Emanuel. The Sun-Times gives us the backdrop for the controversy:

Mayoral hopeful Rahm Emanuel is endorsing the fight to let Chicago taxpayers see more clearly how much tax money is diverted into special taxing districts, away from schools, libraries and other taxing bodies.


“It’s one one of the fastest growing parts of the city budget, but it’s not included in the budget. It should be in the budget, not off-line,” Emanuel said after shaking hands at a South Side “L’ station Tuesday.

Rep. Mike Quigley led a fight to get the the so-called “TIF” [Tax Increment Financing] money — about half a billion dollars a year — listed as a separate line item on property tax bills when Quigley was a county commissioner. That effort never got off the ground. The Daley administration opposed it . . .

TIFs were designed by the state Legislature to help blighted areas. Cities can declare an area blighted and for 20 years afterward any additional property tax revenue above the first year’s receipts can be kept and spent on special projects in that district, such as new street lights, beautification projects, etc.

But the Daley administration stretched “blighted” to include “economic blight” and to declare wide swaths of booming downtown “blighted” in the middle of a building boom, taking hundreds of millions of dollars in tax money away from the Chicago Board of Education, the Library Board, and other taxing bodies. 

Fioretti and other critics of the Daley Administration’s TIF use say that has forced those taxing bodies to raise homeowners’ property taxes. The Daley Administration has responded by using TIF money to build schools and libraries. But aldermen complained that those decisions were made behind closed doors and the TIF funds were used to reward loyal aldermen and punish independents.

“The mission was: it was always supposed to be used for blighted or underserved parts of city — it needs to be on the property tax bill so people can see how much it’s costing,” Emanuel said. “We need to focus on the core mission and make sure neighborhood voices are heard.”

Yep, that's what I recall was the purpose behind TIF districts from my days staffing the House Revenue Committee in Illinois--a tool to revitalize economically blighted areas. The TIF districts in downtown Indianapolis hardly qualify as blighted areas. And their creation was certainly never meant to be used as a funding source for $33.5 million give-aways to the Simon's Indiana Pacers. As the Sun-Times' story reveals, the TIF money provides a half billion-dollar slush fund for Mayor Daley that is not subject to appropriations through the normal budget process, nor are the expenditure of those property tax revenues accounted for on property taxpayers' tax bills. I also found it interesting Daley has used the money for such things as building schools and libraries, things the Ballard administration says are unrelated to economic development. As I recall, Illinois' TIF law had similar restrictions on TIF fund expenditures as are found in Indiana's law. I think what is being proposed in Chicago is a great idea that any state lawmaker on the side of taxpayers should be willing to sponsor in the next legislative session of the Indiana General Assembly. Did you get that, MCANA? Did you catch that, Reps. Hinkle and Noe and Sens. Delph and Merritt? We have a mayor who is obviously not on the side of taxpayers and needs to be reined in. We need your help to restore transparency that is sorely lacking in this administration.