With the ho-hum reaction to the latest report by the Cook County clerk about this year’s TIF take, I’ve decided to raise the white flag.
Yes, I’m surrendering. You win, Mr. TIF.
I mean, I’ve been raising holy hell about this scam since like, I don’t know, Ronald Reagan was president, and it keeps rolling right along.
Case in point, Cook County clerk Karen Yarbrough’s recently released TIF report.
The city’s 138 tax increment financing districts collected about $841 million of your property taxes this year, according to the clerk.
That’s up from the $660 million they collected last year. And, as long as we’re tallying numbers, the TIFs have collected roughly $8.8 billion since the first TIF district was created back in the 1980s. Don’t tell me Chicago’s broke, people.
But nobody seems too concerned about the tax hike.
Wait, wait, it’s worse. The TIF program is designed to eradicate blight in low-income neighborhoods. But most of the money goes to high-income gentrifying ones that don’t need it because . . . they have no blight to eradicate.
We shouldn’t be surprised by this—the TIF program is flawed in such a way as to automatically benefit rich communities over poor ones. As I’ve written about a few times.
This year’s big money winners are the nine TIF districts in gentrifying areas in and around the Loop. They collected more than $360 million in TIF property taxes.
In contrast, the TIF districts in Englewood, Austin, and Woodlawn—the city’s poorest areas—collected less than $5 million.
Robbing from the poor to give to the rich. That’s called economic development in Chicago.
And the inequity is only going to get worse as the City Council, urged on by Mayor Rahm (remember him?), approved two more humongous TIFs, Lincoln Yards and the 78, in gentrifying areas.
This year’s biggest TIF collector was the transit TIF district that runs along the Red Line from North Avenue to Devon. It collected $116 million.
The transit TIF is different from other TIFs in that it exempts the schools. In other words, none of Chicago Public Schools’ property taxes get diverted to the transit TIF.
The Tribune reported it this way in a subhead: “Chicago Public Schools is a big beneficiary of TIF district meant for Red, Purple Line project.”
I hate to be a nitpicker, but . . .
CPS is most definitely not a “big beneficiary” of the TIF transit district. The schools are simply getting the property tax dollars they would have received if the transit TIF had never been created.
Basically, taxpayers in the transit TIF district pay their property taxes to CPS, which diverts that money to the transit TIF, which in turn diverts it back to CPS.
Oh my God, a double TIF diversion! Just when you thought the program couldn’t get more confusing.
I shouldn’t be too hard on the Tribune. The mayor’s school board appointees have had a similar reaction to the TIF program through the years.
They’d obediently watch Mayors Daley or Rahm snatch tens of millions in property taxes from their dead-broke system. And then, when the mayor kicked back a little something to help pay for, say, a new school, they’d fall to their knees in gratitude to say: “Oh, thank you, thank you, thank you, Mr. Mayor, for giving us back the money you took from us in the first place.”
Anyway, where was I going with this? Oh, yes, my new take on TIFs . . .
The best way to describe the TIF is as a surcharge the council—at the mayor’s urging—slaps on your property taxes when they create a new TIF district.
As soon as they create a new TIF district, the taxing bodies (schools, the county, the city, etc) lose their ability to tax all of the property in that district for 23 years.
To compensate for the tax dollars they aren’t getting from the TIF districts, the taxing bodies typically raise tax rates throughout the city. So, everyone pays more in property taxes for a TIF, even if you don’t live in a TIF district.
You know, it seems like I’ve written that explanation at least 542 times over the last couple of decades.
And even now I realize most people who see it are like—huh?
The city isn’t any help in spreading understanding. On the contrary, the city’s official attitude toward TIFs is that they raise tax revenue but they’re not tax hikes.
I think even the most clueless of Chicagoans will agree that this just can’t be. But the city gets away with it. Apparently, taxpayers don’t mind paying the TIF tax because, well, they don’t know they’re paying it.
And that brings me to my new approach to the TIF scam.
Mayor Lightfoot’s scrambling to come up with new ways to raise the money to pay for billions of dollars in obligations. But no matter what fines, fees, or taxes she proposes, someone complains.
But the TIFs? No one complains about them because they’re too complicated to understand.
So, let’s go for broke. Let’s turn the whole city into one giant TIF district. From here on out, all the new property taxes you pay each year—over and beyond the ones you paid last year—will go into a giant slush fund. The mayor’s free to raid it to pay for everything from police and teacher contracts to pensions.
Is that legal? Probably not. But folks, we’re talking about an antipoverty program that mostly goes to the rich. Obviously, little things—like the law—can’t stop our mayors when it comes to TIFs.
Look, if taxpayers are gullible enough to think that $841 million in TIF money just magically appeared out of nowhere, why stop there? Make it $1 billion. Or $2 billion. Or whatever it takes to pay our bills.
Maybe the taxpayers will catch on. But if the past’s any indication, they probably won’t. v