Open Illinois.org

City Taxpayers Have Right to See TIF Transparency
by: Kate Campaigne Piercy
April 20, 2009

Chicago Public Schools has announced a half-billion-dollar shortfall in its annual budget — and last month, CPS board Chairman Michael Scott said local property-tax payers might have to make up the difference. Taxpayers should know some of the money will replace funds diverted from schools to TIF projects.

Each year, your hard-earned money gets diverted from school districts to private developers building expensive projects in your neighborhood without your input — all through tax-increment financing. The public deserves to know more about how the city takes money from property taxes, funnels it into a TIF fund and spends it. Quite simply, TIFs need transparency.

A report by Cook County Clerk David Orr shows TIF districts collected more than $555 million in taxes from tax-burdened Chicagoans in 2007. Nearly half of that money could have gone to Chicago’s public schools. Instead, it went into funds like the Central Loop TIF, which collected an estimated $110 million in 2007; the schools would have received $55 million of that.

Officially, TIF districts are intended to help “blighted” city neighborhoods, but city government has created districts in areas that no reasonable person would consider blighted. City officials just approved $6 million in tax-increment financing allowing MillerCoors LLC to bring its headquarters to downtown Chicago. Can anyone honestly call the Loop “blighted”? Not likely.

With little to no oversight, Chicago uses TIF policy to push money into upscale projects instead of funding its indebted, struggling public schools. Chicago’s children cannot afford more reckless spending from their government. Neither can taxpayers. And clearly, CPS cannot afford to continue losing money to wealthy developers.

The first step to bringing more public understanding and oversight to TIFs starts with implementing transparency. All information about a TIF fund, including any parties involved, such as developers or vendors, the amount of spending, who authorized its creation, contracts and its purpose, should be posted on a local government’s Web site. A detailed, clear and user-friendly list should be accessible to the public.

Full transparency would foster more government accountability and ethical behavior. There’s too much money involved for the public to have such a lack of knowledge about TIF districts and for the government to have no accountability in creating and managing them.

During a tough economy, with taxpayers stretched thin, officials should look for answers to budget shortfalls someplace other than the pockets of working families. This means challenging city government and questioning a process that diverts money from schools and into projects favored by the wealthy and well-connected.