Over the next month, some Chicago aldermen are expected to argue Mayor Rahm Emanuel’s proposed $588 million property tax increase could be largely avoided by closing down the city’s tax increment financing (TIF) districts.
Ald. Danny Solis (25th) will not be one of them.
Solis stepped forward Monday as an ardent defender of TIF districts as City Council hearings opened into Emanuel’s 2016 budget.
“The only thing the public hears about TIF districts is negative publicity,” Solis said. “I think there are way more positives than negatives.”
Emanuel has proposed declaring a surplus of $113 million in TIF funds that he would use to help close next year’s budget deficit.
Aldermen who belong to the City Council’s Progressive Caucus say the mayor should at least double that amount. They contend TIF reform, if done properly, could free up at least $400 million a year.
Solis argues doing so would cause the demise of many worthwhile TIF districts in city neighborhoods that are performing the program’s intended purpose of bringing investment and economic development to what previously were blighted areas.
As Exhibit A, Solis points to the Pilsen Industrial Corridor TIF district in his ward.
Created in 1998, the 907-acre district straddles the Chicago Sanitary and Ship Canal along one of the city’s oldest industrial corridors where Commonwealth Edison and others once employed thousands of workers but left abandoned structures and pollution in their wake.
OPINION
In a TIF district, the amount of property tax revenue provided to local taxing bodies from a specific geographic area is frozen, and any additional revenues generated in the future are set aside to be invested in that area.
The idea is to attract development that wouldn’t occur otherwise and to increase the tax base that will flow back to the taxing bodies after the TIF district is closed.
The big problem with the TIF districts is that they’ve siphoned off most of the property tax revenue generated by the boom in and around Chicago’s central business district during the past two decades, often for pet mayoral projects or corporate subsidies.
But Solis said the businesses that have located in the Pilsen Industrial Corridor TIF, bringing 5,000 jobs with them, would not have done so without the city’s initial investment to clean up the property made possible by the TIF.
The district is now home to the Chicago International Produce Market, which was moved to make way for the University Village housing development, and hundreds of other small, mostly light industrial businesses, Solis said.
The Pilsen TIF is expected to generate $10.2 million this year, which should grow to $11.6 million a year by 2019.
That’s money that Solis is allowed to put toward projects benefitting his ward, as long as they are located within the boundaries of the TIF district.
In this manner, Benito Juarez High School received some $15 million for a performing arts expansion, while Dvorak Park received funding for a new play area.
Solis said he also has been able to use TIF funds for an addition and new playground at Whittier Elementary School.
The city also pulled $6.4 million out of the TIF district to finance major renovations at its animal shelter on Western Avenue.
A list of 2015 spending shows money going toward street resurfacing projects, alley construction, sidewalks, lighting, traffic signals, bridge repair and a feasibility study for what Solis calls a “poor man’s 606” bike and pedestrian path.
“We wouldn’t have been able to do this without [the Pilsen TIF],” Solis said.
There’s also funding for a small business improvement fund to be used for building facades and another fund for a job training program.
And not to be overlooked, there’s $22.9 million set aside over the next five years to pay debt service on bond issues where the money was already spent.
Solis urged City Budget Director Alex Holt to help him make the case that when the TIF districts mature (the Pilsen TIF expires in 2022) all those tax dollars will then flow directly to the city and to the rest of the taxing bodies.
Others believe the time to turn back the money is now.
