Commissioner wants closer eye on TIFs Commissioner wants closer eye on TIFs
Wednesday, September 13, 2006
by Jonathan Lipman
A Cook County commissioner is pushing for greater public disclosure about special taxing districts as part of a broader push against Chicago's aggressive use of them.
Mike Quigley (D-Chicago) said he wants property owners inside a tax increment financing district to see on their tax bills how much of their payment goes to a TIF fund — just like they see how much goes to schools, parks and the city.
"These funds are frequently misused, and there's an astounding lack of accountability," Quigley said.
He proposed the change in tax bills at last week's county board meeting and is awaiting a hearing.
Quigley is protesting the proposed LaSalle Central TIF, which would cover most of the central Loop. The city's community development commission approved it on Tuesday, and it now heads to the city council.
TIF districts are a widely used economic development tool that were initially designed to promote redevelopment of blighted areas. As their use has proliferated in the Chicago area, a growing number of critics has questioned whether they're being overused — providing unnecessary tax breaks to developers.
Once a property is included in a TIF district, any extra tax revenue generated by its increase in value goes into the TIF fund, rather than the affected taxing bodies, until the TIF district expires.
The money in a TIF fund is typically used to pay off bond debt incurred by a town to pay upfront for infrastructure improvements within the district. But once that debt is retired, all extra tax revenue within the district goes to local governments.
Quigley said TIF districts "rope off" some of the taxable value of land within them, leaving other taxpayers to pay more to make up for that lost tax revenue.
"In Chicago, your tax bill is 10 percent higher because of TIFs," Quigley said. "That's just a fact."
But city officials and TIF experts said Quigley is wrong.
"That's erroneous," said Lori Healey, Chicago's planning and development commissioner. "You can point to districts all over the city where nothing would have happened if it weren't for that (TIF district)."
Healey said that without TIF districts, many sites in Chicago would remain vacant or blighted, producing little or no tax revenue.
Two local TIF experts agreed with Healey. Peter Skoskey, urban development director of the Metropolitan Planning Council, and Rachel Weber, associate professor of urban planning and policy at the University of Illinois at Chicago, said TIF districts, when used correctly, don't hurt other taxpayers.
But Weber said it's hard to prove that TIF districts are really needed to spark development or redevelopment, so more disclosure about their cost is a good thing.
"A developer, when they come in, they're always going to say they need that (TIF) subsidy," she said. "The county and other taxing bodies have every right to be concerned with the speed with which the city is enacting TIFs."