In July, my office released an annual report that shows tax incremental financing in Chicago, commonly called TIF, will generate $461 million in property tax revenue this year alone, an $89 million increase over last year. TIFs in Chicago account for about 5 percent of the city’s budget, yet it is difficult for the average taxpayer to track these funds.
When TIF funds are not earmarked for specific projects, City Hall has broad discretion as to how to spend that money. Meanwhile, our public education system is strapped for cash.
I have long called on the Chicago City Council to engage in public debate on budgeting for TIF funds and projects. I also have called on the city to declare a TIF surplus, which would require property tax revenue to be returned to struggling taxing districts.
OPINION
A proposed ordinance, the Chicago Public Education Revitalization Ordinance, would require Chicago to annually determine if the Chicago public schools are financially distressed and, if so, to return CPS and Chicago’s portion of any TIF surplus to the public schools. Through TIFs, cities and towns typically divert future property tax revenue increases from a particular area to fund economic development projects in the community.
I support this ordinance for two reasons.
First, the ordinance requires the city to publicly account for all TIF money. I have been calling for this for years. The public deserves to see how TIF money, funded with their tax dollars, is being spent. Such transparency will make it easier for taxpayers to determine whether their tax dollars are being spent in the best ways.
Second, we must put a priority on funding public education. The future of our children matters more than TIF funds that may be used to fund potential future projects.
As of July of this year, the City of Chicago has declared about $116 million in surplus TIF funds. Such an enormous surplus suggests that some Chicago TIFs have outlived their purpose and simply are not needed. Taxpayers are paying millions of dollars into funds that have no assigned purpose.
I applaud the 37 aldermen who have sponsored this important ordinance. I urge Mayor Rahm Emanuel and the City Council to pass it swiftly, and I challenge them to go a step further: make all TIF spending decisions part of the annual budgetary process.
We’re not talking about pocket change. TIF spending amounts to hundreds of millions of dollars each year.
City residents — who recently have been asked to pony up more money in property taxes, garbage collection fees and water taxes — have a right to expect open hearings and debate about how the city is using their money.
David Orr has been Cook County Clerk since 1991.
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