Cook County TIF districts bring in $1 billion
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Tax-increment financing districts in Cook County brought in a record-breaking $1 billion last year, according to Cook County Clerk David Orr’s annual TIF Revenue report.
That’s nearly 18 percent more than 2016, the report shows. The county is comprised of 447 districts, with 143 located in Chicago. The city’s districts generated $660 million in tax revenue last year, a $99 million, or 18 percent, increase over last year.
The city’s Transit TIF, which is for the Red and Purple Modernization Project, drew a little over $40 million, which is more than double the amount of revenue it brought in for the project last year.
When a TIF district is created, the dollar amount of property tax revenue being collected within the district’s boundaries continues to go into the general fund. But any additional property tax revenue collected — the “increment” — goes into the TIF fund, and is to be invested back in the neighborhood over a 23-year period.
The idea was to spur, then support, economic development in blighted areas. But the number of TIFs has boomed as they have morphed into a way for government to create dedicated pots of money that can be used on all sorts of projects.
In Chicago, one in four properties are in TIF districts, compared to one in 22 properties in suburban Cook County.
Many of the 10 city TIF districts generating the most revenue were on the North Side; others are in or around the Loop, or the central business district. The LaSalle Central TIF, which includes part of the Loop and the Near West Side, generated the most last year: $56.7 million.
Of the bottom 10 city TIF districts in terms of revenue, only one brought in any money at all. The Ogden/Pulaski TIF generated revenue $22,000. The other nine at the bottom of the list brought in no actual revenue. Most were on the South Side and West Side.
Almost a third of all property taxes collected in Chicago go into TIF funds, Orr said, a statistic he found “stunning.”
“This is a lot of money and the fundamental question is are we spending it as wisely as we could, given we really do have a tale of two cities in Chicago, particularly with massive wealth in some parts of the city and massive amounts of poverty in other places,” Orr said.
Orr said aldermanic prerogative, or aldermanic privilege, is “one of the main problems in not having a better process in deciding TIFs and how they’re spent.”
Orr urged reforms to create more equal distribution in TIF funds, including a reduction in TIF areas, specifically those that have surpassed their project goals, and an audit of all existing TIF districts to prevent “an unnecessary burden on taxpayers.”
“It’s a balance we’re looking for and I’m suggesting we’re not getting that balance partly because of aldermanic prerogative and partly because of the lack of accountability and visibility,” Orr said.
“The real question now, when you look at River West and the million-dollar condominiums and so forth and we’re still pouring [money] into that TIF, is that an area that is kind of blighted and therefore we have to keep putting money in or could it be better used to deal with other issues in the city?”