- Getty Images
- The Loop and surrounding areas get most of the investment from the tax increment financing program, according to city data.
In case you were distracted Tuesday by that other debate—you know, the one between Rahm Emanuel and Jesus “Chuy” Garcia over who’s best equipped to be mayor—you might have missed the latest showdown over the city’s tax increment financing program.
This round, like the last one, was prompted by a Crain’s columnist I’ll call Greg Hinz, since that’s his name. Greg’s latest piece was itself prompted by a story I wrote last week with my colleague Ben Joravsky, though Greg referred to us as “my friends at the Chicago Reader.”
I think I can speak for Ben when I say that we’re both fond of Greg, and we’re always grateful for signs of people actually reading our TIF stories. Plus, I totally understand why Greg wouldn’t criticize us by name, since few who’ve attempted to spell “Dumke” or “Joravsky” have come out unscathed.
Anyway, here’s the deal. The TIF program was created to spur development in struggling areas that wouldn’t get it “but for” an extra boost. In designated TIF districts, a portion of property taxes are siphoned into special accounts that are supposed to be used for investment. Citywide the total TIF take is now more than $400 million a year.
TIFs have become a hot issue in the mayoral race as both Emanuel and Garcia promise to dip into the funds to pay for a range of city expenses.
But the program does not work as advertised. Here’s the indisputable truth we reported: in the last four years, 48 percent of the TIF spending has gone into a central area that accounts for 5 percent of the city’s geography and 11 percent of its population.
The area includes the Loop and surrounding neighborhoods, most of which have been booming with development for years but continue to reap the benefits of the TIF program—which is great, except that most of the city is losing out on that kind of investment.
Greg has a big problem with our analysis: he doesn’t think it’s fair to refer to this central area as “downtown.” He believes our boundaries—which we spelled out in the story—are too broad for that term.
By that logic, our questions about whether the TIF program is serving its original purpose of lifting depressed communities—or whether it’s bringing investment to all parts of the city—aren’t as important as what to call this area that’s getting almost half the money.
I respectfully disagree. Call the area “downtown” or don’t. Call it “Gregland” if you like. The fact remains: 48 percent of the TIF money is going to 5 percent of Chicago.
Still, just so everyone’s on the same page, I’ll step even deeper into geek territory for a moment.
In our story we defined the “central” part of the city—aka Gregland—as the area from the Gold Coast south to McCormick Place and from the lake west to the United Center. If you want street names, we’re talking North Avenue down to 24th Street and Lake Michigan to Western Avenue. (For real nerds, here’s a list of all the TIF districts and how we classified them by part of town. And here’s how we calculated the central area population.)
It’s true that these boundaries are broader than the ones Greg apparently used to define the “central business district”—he says he went “roughly” as far south as Cermak (aka 22nd Street) and as far west as Ashland. Why there? Because that’s what he determined was right.
As a result, his calculations show that about a third of TIF spending under Rahm went to the “central business district.”
Here’s what he doesn’t say: that area accounts for around 9 square miles out of the 237 square miles that make up the city.
In short, if I’m using Greg’s terms, 3 percent of the city received around 33 percent of the TIF investment. Sound fair?
For those of you still awake, here’s something worth noting: the reason we’re going back and forth with Greg about this technical stuff is that the city doesn’t provide clear, easy-to-understand information about the TIF program. A lot of data is available online, but try wading through it to find the answer to a simple question: How much investment is my neighborhood getting?
Even the data we’re arguing about isn’t available on the city’s website. The Emanuel administration provided it to Greg and Crain’s, which then posted it in a user-friendly format online. I know because when I contacted the city to get the data myself, I was referred to the link from Crain’s.
That brings us to Greg’s next red herring. He argues that any analysis of how much money goes to central Chicago is off base—even his—because many of its TIF projects help people who don’t actually live there. A new CTA Green Line station at Cermak, for instance: “Doesn’t improving the ability of people to get to their jobs downtown from the neighborhoods have some value beyond the central business district?”
Yes, of course. Who doesn’t want investments in train stations, schools, roads, and bridges in the heart of the city?
At the same time, who doesn’t also want them in the neighborhoods where most of us live?
We can certainly discuss whether a given project approved by Mayor Emanuel is “good” or “bad” in the view of a Crain’s political columnist, or even a couple of dudes from the Reader. But the key problem with the TIF program is that the money isn’t distributed according to need or any other fair formula.
Consider what Ben and I call the “far south side”—a vast swath of the city from 79th to 138th streets, from the lake west to Western. It includes many of the poorest parts of Chicago, yet it’s only getting 4 percent of TIF spending. If those communities were able to attract more investment and jobs, everyone in the city would benefit from a broader tax base.
This is the real shortfall of the TIF program. It pours money back into areas that are already developing. But unless the rules are dramatically rewritten, it will never bring economic investment to all of Chicago, and especially to areas most in need.