Every time I go out into the world to talk about the evils of tax increment financing in Chicago, one of the first questions the audience asks is whether there’s anyone, anywhere, willing to fight this monstrosity.
Or is everyone controlled by our all-powerful mayor?
Sad to say, I’ve usually had to respond that the answers to those questions are no and yes, respectively. Our elected officials are silent when they’re not lining up—literally, in many cases—behind the mayor’s $450-million-a-year slush fund. That’s why CPS is saying it’s so broke it has to close more than a fourth of its elementary schools, even as the mayor has about $1 billion in tax revenues piled up in his TIF accounts.
But now it looks like somebody, somewhere, is taking up the mantle after all. Taxpayers of Chicago, meet your new defender: state representative Rita Mayfield—of Waukegan.
Mayfield, a Democrat, recently introduced a proposal that would take a step toward reform by keeping schools out of the TIF equation. “I used to be on the board of education in Waukegan,” says Mayfield. “So I know all about TIFs and what they do to school funding.”
I know, it’s ironic to think you have to go all the way to Waukegan to find a politician with the guts to clean up Chicago’s TIF mess. But that sort of sums up our whole political system, when you think about it.
In case you’re new to this, let me take you briefly into the netherworld of TIFs and property taxes.
By and large, school districts, including Chicago’s, fund themselves by slapping a tax on property. But TIF districts limit the amount of property that schools get to tax. As a result, the Chicago school board has to raise everyone’s tax rate to compensate for the money it’s not getting from TIF districts. Most people put up with higher taxes for schools because they think educating children is something civilized societies are supposed to do.
Mayor Emanuel—like Mayor Daley before him—takes advantage of our commitment to kids by pulling a switcheroo. He allows roughly $225 million a year in property taxes to flow into TIF accounts instead of the schools, where they’d go otherwise. And he’s pretty much free to spend the TIF money as he wants.
How can he get away with this? That’s easy: no one in a position of power tries to stop him. Even worse, other elected officials are complicit, justifying the program as somehow beneficial to the public schools.
In the good old days of the 2000s, when a few functionaries at the Chicago Public Schools weren’t too scared to talk, I had all sorts of great off-the-record chats about this scam. They generally went like this:
CPS guy: What are you complaining about? The mayor gives us some of his TIF money to build schools.
Me: Yeah, you give him a dime and he gives you back a nickel.
CPS guy: You know, Ben, it’s time you learn a thing or two about how Chicago really works.
Of course, CPS officials are members of the mayor’s team. He appoints them to their jobs and they do what he says. If they don’t want to be on the mayor’s team, they should quit and write columns for the Reader, or whatever it is that guys who aren’t on the team do in this town.
So year after year the scam continues. School bosses come and go—Paul Vallas, Arne Duncan, Ron Huberman, Jean-Claude Brizard, and now Barbara Byrd-Bennett. Each of them is smart enough to look the other way as tens of millions of much-needed property tax dollars flow down the TIF chute. And the students of Chicago do without art and drama and, in some cases, modern science labs.
And that’s where Representative Mayfield comes in—she wants to seal off that TIF chute.
Earlier this year she introduced legislation, HB 197, that would amend the state’s TIF code so the share of taxes levied on “each taxable parcel of real property which is attributable to a school district” shall “be paid to the school district.”
In real English, that means school districts would be left out of newly created TIFs (it would not affect existing ones). More to the point, the schools wouldn’t have to divert any of the money they collect—they’d keep it all.
The proposal would kill the TIF program as we know it. So you can expect the mayor and his acolytes at CPS to fight Mayfield’s proposed amendment as if it were an invasion from Mars.
Sure enough, several CPS lobbyists showed up at last Wednesday’s meeting of the house education committee, where the bill now sits.
“They wanted me to exempt Chicago from my proposal,” Mayfield says. “It floored me. You’re talking about closing 129 schools and you don’t want all the money you can get? My God, it’s crazy. I told them I would never exempt Chicago from any of my bills. If anyone needs this, it’s Chicago.”
Yet Laura Farr, the CPS manager of state legislative affairs, subsequently sent Mayfield an e-mail explaining why the schools oppose her bill. “It might undermine the financial viability of existing TIFs, which currently provide significant funding for CPS capital projects,” Farr wrote.
Except that shouldn’t be a real concern, since Mayfield’s proposal would only affect future TIF districts, not existing ones.
But Farr also wrote that the bill would “undermine the financial viability of future TIFs—thereby limiting the ability of CPS to use TIFs to fund future capital projects.”
Well, that’s the whole point. It’s time CPS cut the cord on the TIF program. In other words, instead of hoping that the mayor gives them a nickel, they should keep the whole dime.
But Farr had yet another point of contention, writing, “It’s not clear that [the bill] would generate extra money for schools under tax caps.”
This is what I call the Patrick O’Connor argument, named after the 40th Ward alderman and City Council floor leader for the mayor. O’Connor utters this whenever he gets a chance to defend the TIFs. The reasoning is based on the fact that there’s a cap on how much schools can tax property payers, but TIFs aren’t affected by the cap. So the TIFs enable the city to tax beyond the limits created by the cap.
Remember that, 40th Ward voters, the next time Alderman O’Connor tries to tell you he’s looking out for taxpayers.
Actually, I might almost be open to the gimmick—sneaky as it is—if so much of the TIF money didn’t go toward subsidizing wealthy developers while the rest of us are feeling so overtaxed. But I promise I won’t complain about the 20 percent hike in my property tax bill. Or the 11 percent hike in my water/sewer bill. Or all the excessive fees and fines we routinely pay. Did I mention that parking meter rates are way up?
Anyway, Representative Mayfield’s proposal is a nice way to start blowing up this scheme as it’s practiced in Chicago.
“We’re going to have a meeting where we all sit down together—CPS, the city of Chicago, Chicago Teachers Union—and discuss this issue,” Mayfield says. “I’m not letting it die.”
Presumably, the five state reps from Chicago who sit on the education committee will also attend that meeting: Kenneth Dunkin, Esther Golar, Marcus Evans Jr., Monique Davis, and Camille Lilly. Most of them represent relatively low-income, predominantly black communities that are on the losing end of this program.
Take a page from Rita Mayfield: Don’t be afraid of the mayor. It’s never too late to take a stand.