TIFs are too important—and controversial—to fade away anytime soon


Gillespie says her constituents have had it with TIF. Sounding much like the Chicago Teachers Union did when it buffaloed then-Mayor Rahm Emanuel into banning new TIF projects downtown, she says that cities which use TIF too often operate in the dark, exploit loose wording in the law, and deprive school districts and other levying agencies of their fair share of taxes.

Her constituents “think that TIFs are black holes,” Gillespie declared in a phone interview. The state law authorizing TIFs “just isn’t working the way it was intended to.”

Under current law, Chicago or another burg can declare a neighborhood blighted under some loosely defined rules and for the next 23 years use any increase in property tax income from those areas strictly on developer subsidies, public works projects and other work in that neighborhood. Gillespie’s proposal would add some specifics to “blight,” for instance, requiring that a certain percentage of residents receive food stamps or be below the poverty line for their neighborhood to qualify as blighted. She’d also require that officials from other local governments, like schools, have to sign off on a TIF district before it could be created, with appeals going to the Illinois Department of Revenue.

Illinois Municipal League Executive Director Brad Cole likens the latter to putting the fox in charge of the hen house, since the schools never want to lose money to anyone but don’t have the economic development responsibility that cities and villages do. Having beaten back an earlier effort by Gillespie to shorten the life of TIF districts from 23 years to 10 years, he says most lawmakers long ago have concluded it would be better to leave the situation alone.

In reality, who’s right varies case by case.

For instance, when Chicago created the largest TIF district in the state, the one being used to rebuild the Chicago Transit Authority’s Red Line north, every pro-CTU alderman voted in support. But rules of that district were carefully written to exclude schools and guarantee that they’d get their normal share of tax receipts.

Another example: A new plan drafted by the Urban Land Institute to revive and reorient the outmoded LaSalle Street financial district says that one of the best ways to come up with money needed in a neighborhood critical to Chicago’s overall health is—guess what—TIF. It wants to lift Emanuel’s ban on downtown TIF spending, asserting that the ban itself is outmoded.

On the other hand, the problem with too many TIF districts is that their budgets operate pretty much in isolation, with little scrutiny, rather than having to compete with all the other needs at budget time. Fix that and you might fix much that’s wrong with TIF.

Though Cole says the battle is over for awhile, Gillespie is hoping to graft her proposal onto some bigger package in the remaining days of the Legislature’s spring session. If that doesn’t happen, there’s always the fall veto session, she adds.

C’est la guerre. TIF is too important and too controversial to fade away as a political issue in Illinois anytime soon.

via Crain’s Chicago Business

April 4, 2022 at 06:54AM

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