EDITORIAL: No matter who’s mayor next, property tax spending is in for overhaul
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Let this sink in about Chicago property taxes: Roughly one in every three dollars is not spent on what you might expect.
Not on public safety or fixing potholes or sprucing up the park down the street.
Instead, a third of Chicago’s property taxes are siphoned off each year — $660 million last year, $561 million the year before — to create a special fund for the mayor to spend more or less as he sees fit.
It’s called tax increment financing money and, critics complain, it is too often used to benefit fancy downtown and North Side projects such as Navy Pier and Lincoln Yards, while South and West Side neighborhoods go begging.
This year, Mayor Rahm Emanuel also is continuing his practice of using a TIF money surplus to shore up the city and schools budgets.
Our own view is that the next mayor and City Council should be considerably stingier with TIF subsidies, spending much more of the money to uplift truly struggling neighborhoods. As we wrote in an editorial last week, it is galling that Target is closing two South Side stores while getting $13 million in TIF money to open a store on the Far North Side.
With all this mind, we asked 19 of the 21 mayoral candidates, via email, a simple question: As mayor, what would you do about TIFs?
In general, all 16 candidates who replied agree that the TIF program should be reined in to deliver more of the money to impoverished communities that might otherwise not attract new development. By state law, that’s the basic purpose of TIF districts.
Here’s a brief summary of where the candidates stand on TIFs. To read their full replies to our question, click here.
Cut back on TIF districts: Candidates Toni Preckwinkle and Ja’Mal Green would get rid of TIF districts altogether.
“We’ve really got to look at unwinding as many of those TIFs as we possibly can and turning the resources back to Chicago Public Schools,” Preckwinkle said last Monday, a day before she won the Chicago Teachers Union endorsement. She said she would give all annual TIF surpluses to the schools until all 144 TIF districts are phased out.
Green said Chicago should simply “abolish” TIFs and create a new tax subsidy entity that is laser-focused on impoverished communities.
Lori Lightfoot, Robert “Bob” Fioretti and LaShawn Ford called for a moratorium on creating new TIF districts.
”When I am mayor, the city will not create new TIF districts until we have fully analyzed the performance of existing districts to ensure that they are meeting their intended objectives and that the private recipients of TIF funds are satisfying their contractual obligations,” Lightfoot wrote.
Spread the surplus money around: Fioretti, Garry McCarthy, Dorothy Brown and Gery Chico, like Preckwinkle, want to use surplus TIF dollars to shore up city finances.
McCarthy would spend ”the $1.4 billion sitting in Chicago’s various TIF funds” on a $400 million property tax cut, a $130 million restoration of city retirees’ health benefits, a $275 million infusion of money for CPS and a transfer of up to $500 million from TIFs in affluent neighborhoods to those in poor communities.
Fioretti would “reopen our mental health clinics, shore up some of our school budgets, make a payment into our beleaguered pension fund, turn some of the closed schools into community centers that drive economic development and begin meaningful economic development programs.”
Chico would return the money to CPS “and other taxing bodies.”
Get-tough measures: To a greater or lesser degree, every candidate vowed to make sure TIF money goes where it’s supposed to go. Lightfoot provided us with a detailed list of reforms, including “performance thresholds,” for judging a TIF’s effectiveness, tougher standards for determining whether an area is “blighted” and “clawing back TIF funds” from ineffective districts.
Paul Vallas vowed to “implement a new paradigm” with “clearer TIF guidelines for developers.” Vallas would dedicate a third of TIF revenue to a Chicago Equity Investment Fund to be used in blighted areas.
Amara Enyia would give the City Council the power to approve — or vote down — “porting,” a process the mayor’s office uses to steer TIF money to favored projects.
Keeping the public informed. Every candidate promised more “transparency” than Emanuel, whose administration put in place a TIF web portal that includes maps and lists of projects.
“Transparency is more than just dumping PDFs online,” Enyia wrote. “It also includes making information easily accessible and digestible.”
And Susana Mendoza wrote that she would “build on the existing TIF web portal to list projects under consideration for TIFs,” not just approved projects.
Vallas, Lightfoot and others also offered specific ideas for opening up the process to the public.
For more basic information about how TIFS work, visit the Cook County clerk office’s website. And most importantly, we urge Chicago voters to visit the websites of all the candidates and read more about where they stand on TIFs and other major issues.
No matter who is elected Chicago’s next mayor, TIFs — that financial monster of a program that controls a third of Chicago’s property tax dollars — looks to be in for a major overhaul.
Bill Daley: daleyformayor.com
Paul Vallas: vallasforallchicago.com
Gery Chico: chicoformayor.com
Amara Enyia: amaraenyia.com
Robert “Bob” Fioretti: bobforchicago.com
La Shawn Ford: fordforchicago.com
Willie Wilson: williewilsonformayor.com
Ja’Mal Green: greenforchicago.com
Dorothy Brown: dorothyformayor.com/2019
Susana Mendoza: susanamendoza.com
Jerry Joyce: jerryjoyce2019.com
Lori Lightfoot: lightfootforchicago.com
Toni Preckwinkle: toniforchicago.com
Garry McCarthy: garryformayor.com
Neal Sales-Griffin: nealformayor.com
John Kenneth Kozlar: johnkozlar.com
Roger L. Washington: www.washingtonformayor.com