Next month, for the first time ever, Cook County property owners will be able to look at their newly arrived tax bills and see just how much of their tax payment is diverted into controversial Tax Increment Financing districts.
The change — which will affect the roughly 12 percent of Cook County property owners who live in TIF districts — adds “transparency” to an area of municipal financing that has been opaque to the public, Cook County Clerk David Orr said Thursday when announcing the change.
By including the information on tax bills, the hope is that more governments will make TIF spending decisions “in an open format and not behind the closed door of the community development board,” said Bill Vaselopulos, Orr’s Director of Real Estate and Tax Services.
Brought to Chicago roughly three decades ago as an obscure funding tool for North Loop development, TIF districts have multiplied across the city and county. They are typically created to raise cash for special projects and improving blighted areas.
When a TIF district is created, the amount of money governments collect through property taxes in the district is capped, based on locked-in property value. Any additional property taxes collected above that amount — due to rising property values or new development, for example — is diverted to a TIF fund.
And while TIF districts have been credited with revitalizing rundown neighborhoods, critics have blasted them as slush funds for elected officials that rob schools and parks of adequate funding.
Indeed, Orr’s office showed a sample bill for a parcel of property in the 43rd Street and Cottage Grove TIF district. The accompanying breakdown showed that 83 percent of the property tax bill went to the TIF district.
Tom Tresser, organizer of the TIF Illumination Project, predicted the new information could foment taxpayer backlash.
“I am predicting a fireball of questions and protests as people look at their (TIF) bills for the first time,” Tresser said. “We have been told we are broke, but the TIFs extract property tax and send it into the hands of private developer with no rhyme or reason.”
On Thursday, Orr’s office also announced property tax rates that will be applied to biannual tax bills, which are due Aug. 1. Property owners in Chicago will likely see increases ranging from 0.5 percent to 1.5 percent, Vaselopulos said. Property owners in suburban Cook County will likely see an average increase of about 2 percent, he said.
The sheer number of governmental bodies in the suburbs makes it hard to generalize about why rates are going up suburban Cook County, Orr’s office said. But in Chicago, the increase is largely driven by small increases in the levies for Chicago Public Schools and the Chicago Park District.