By raising the tax rate, Emanuel ensures more money will be flowing into his tax increment financing slush fund. Credit: Ashlee Rezin/Sun-Times Media

Two weeks ago, Mayor Rahm Emanuel let it be known that he was planning to raise property taxes by at least $500 million to pay off some of the many obligations he’s been ignoring for the last four years.

Apparently his plan to have those debts magically disappear on their own didn’t work out.

Well, it’s my misfortune to be the guy who breaks the bad news that the mayor’s tax hike will be at least $40 million more than he’s letting on, once we’ve taken into consideration the impact of our old friend Mr. TIF.

That’s the tax increment financing program intended to eradicate blight in low-income communities that has instead turned into a billion-dollar mayoral slush fund. You know, that TIF program.

I was sort of hoping to get through this budget season without mentioning TIFs, but that’s a little like walking through a rainstorm without getting wet.

Once the mayor raises the overall property tax rate to bring in that $500 million, he’ll inevitably make you pay still more money into his beloved TIF pot.

That’s really all you need to know about this topic. Unfortunately, I’ve reached that point in the narrative where I have a journalistic obligation to explain how this Rube Goldberg scheme works—even if reading it is like eating broccoli: you know you’re supposed to do it, but yuck! So here goes . . .

The levy is what government intends to raise from property taxes to pay for services that we presumably need. Government raises the levy by multiplying the taxable value of property—it’s called the EAV—by the tax rate. So if the mayor wants to raise a levy of $100 and the EAV is $1,000, then he needs a tax rate of 10 percent to do the trick.

When the City Council creates a TIF district, it sets aside a portion of the EAV called the increment. All the money raised by taxing the increment is diverted from the levy and into a bank account controlled by the mayor. Hence, the slush fund. Though I’m pretty sure that term doesn’t appear in any official explanation of how the program works. Raising the tax rate absolutely, positively means there will be more money flowing into the TIF bank accounts. Get it?

You know, I think this might be more fun to read about if I gave the property tax nomenclature colorful nicknames like crime reporters do for mobsters: Joey “the Clown” Tax Levy, Angelo “the Hook” EAV, or Jake “Greasy Thumb” Tax Rate.

My tax expert sources at the county figure that with a $500 million tax hike the mayor can expect to raise at least $41 million in TIF money, depending on a bunch of variables, the EAV included. In any event, he’ll have more than the $372 million in TIF slush he had this year.

Just so you know, essentially all taxpayers pay into TIF funds even if they don’t live in a TIF district. Here’s how that works:

To compensate for the increment it can’t tax in a TIF district, the mayor has to raise the overall tax rates that everyone pays. Otherwise he won’t get his levy. Thus the TIF is a tax the mayor slaps on your tax bill without telling you he’s doing it. That way he gets to claim he’s holding the line on property taxes even as he raises them. I’m telling you—Al “Scarface” Capone never came up with a scam this audacious.

The bottom line: the higher tax rate equals more slush.

So the burning issue of the day is what the mayor will do with the extra tens of millions of dollars in TIF slush.

Last year Chicago grappled with this issue when Mayor Emanuel jacked up property taxes to pay for his ill-fated municipal employee pension plan. Back then, two of his allies—Aldermen Ameya Pawar and Will Burns—proposed that the mayor use the extra TIF money for the schools, since he took the money from the schools in the first place. (Don’t worry, I’ll save that explanation for another time.)

The mayor went along with them largely because he was running for reelection and he wanted to look like a TIF reformer. Now that he’s safely in office, his attitude toward TIF reform—if I may continue the mobster analogy—is a little like Scarface’s contempt for Eliot Ness.

And that’s where you come in, people. It’s your obligation as an informed citizenry to make the mayor spend the TIF money on things we need, as opposed to things we don’t need—like that Marriott hotel and DePaul basketball arena the mayor’s building in the South Loop with the help of $55 million in TIF money.

Alderman Pawar proposes the mayor put the TIF money into education. “We should issue a giant bond against that incoming TIF money so we can invest in neighborhood high schools,” Pawar says. “Even if taxpayers take a hit they’re not happy about, we will be investing in neighborhood schools like Lakeview, Clemente, and Amundsen.” And while we’re at it, the new Dyett High School, which the hunger strikers are making the mayor open.

There you have it, folks. We can wake up and pay attention to the details, or go back to sleep and let the mayor waste our money on stupid stuff. I don’t think we can afford to be stupid anymore.  v