GUEST POST BY TOM TRESSER
I’m looking for citizen journalists to help investigate and expose Tax Increment Finance (TIF) district abuse in Chicago and Cook County–and then across Illinois. You probably know that TIFs are an often abused mechanism for funneling property taxes to special projects–ostensibly to fight “blight” and put development in under-served areas. In Chicago companies such as Home Depot, United Airlines, the Chicago Mercantile Exchange, Coca-Cola, UPS, Jewel-Osco, Target and Willis Insurance (who bough the Sears Tower) hav eall received tens of millions of dollars of property tax gifts via Chicago’s poorly monitored TIF program. So much for blight and the under-served getting development help!
I’m working on a new social venture enterprise, The CivicLab, to be a place for ongoing civic investigation and innovation. Our first effort is the TIF Report which is looking at the impacts of TIFs on a ward-by-ward basis in Chicago. We are developing data scrapping and visualization tools to bring the TIF story to life here. We are looking for writers, coders, web developers, app developers and graphic artists to help with this work.
This is a rough draft of the poster-size graphic our team is working on to illustrate what TIFs are and how much property tax the 12 TIFs that cover the 27th Ward on Chicago’s Near North side have diverted from local government over the past nine years. The idea is to publish this information on an easy-to-navigate web site AND distribute several thousand of these graphic posters through out the ward and meet with community groups to walk them through the information.
I came to the TIF work via my efforts to derail Chicago’s 2016 Olympic bid in 2009. As a co-organizer for No Games Chicago I was part of a group of all-volunteer concerned citizens that thoroughly debunked the hype surrounding Mayor Daley’s pet project that consumed the city for two years and which raised $90 million for marketing and expenses.
Part of the frame for pushing the bid was that the city was broke, but we sorted through local finances and came across a pot containing $1.4 billion in property taxes! These funds were found in the combined bank accounts of the city’s then 160 Tax Increment Finance districts. We had to get the separate reports of these districts and open them up, one at a time, and total the “Fund Balance” figures for each district.
No one had done that. No one (outside of City Hall) knew that these bank accounts held so much money. This was especially galling since the city was closed for three furlough days in 2009, public health clinics were closed, public schools were closed and the public transit system was placed on a budgetary “doomsday watch” twice.
We realized that the city was lying about its financial situation and making it impossible to maintain and grow essential public services – and, instead, were showering hundreds of millions of public dollars on private developers and well-known and well-off corporations. We started to really look into TIFs and other corporate give-aways.
TIFs have been around in Chicago since 1986 but they really started to take off in the early-mid-1990’s – some would say co-incidental to the rise of pin-stripe patronage in Chicago. TIFs and local government
Finance used to be covered by Jackie Leavey and the Neighborhood Capital Budget Group, but they are out of business. When 5th District Congressman Mike Quigley was a Cook County Commissioner, he was deeply involved in TIF reform efforts. The two top experts in Chicago now would have to be political reporter Ben Joravsky (see his work at http://www.chicagoreader.com/chicago/the-chicago-reader-tif-archive/Content?oid=1180567) and Prof. Rachel Weber of the University of Illinois at Chicago (Prof. Weber is on the CivicLab Advisory Council).
TIFs are coming out of the shadows and a number of civic players are angling to end them, use them or re-direct them. The Chicago Teachers Union foregrounded TIFs in their recent strike communications and pointed out that the city couldn’t be THAT strapped for cash if a TIF in the Hyde Park community was poised to shower $5.2 million on the construction of a Hyatt Hotel on property owned by the University of Chicago. Sweet Home Chicago is a coalition of social service groups seeking TIF funds for affordable housing initiatives. And the RAISE Your Hand Coalition is a city-wide group of parents of public school parents who also want money in the TIF accounts to go the Board of Education.
We see this as a national effort because TIFs are in every state but two and are subject to widespread abuse and lack of accountability. If you are interested in joining this combination of old school investigation, new school data visualization, and community organizing, please contact Tom Tresser at tom@tresser.com or 312-804-3230.
New Jersey’s embattled Revel Casino received more bad news this week. State Senate President Stephen Sweeney has called on the Division of Gaming Enforcement to investigate the Casino’s “precarious financial position.” Despite the fact that it has been operating at a loss in 2012, Revel management has claimed that its inability to make good on its construction debts and city property tax bill is a result of Hurricane Sandy. Predictions that the casino will fold are growing louder.
Tax-increment financing is the most insidious type of economic development subsidy. Whereas it’s clear in programs such as property tax abatements that public revenues are being given away, proponents of TIF have often persuaded public officials that it provides something for nothing. That’s wishful thinking, of course—TIF-subsidized projects increase the demand for public services but don’t contribute to the revenues needed to pay for them—but too many officials have succumbed to the illusion. TIF is now used (often overused) in every state but Arizona.
