I was up to my neck in tax increment financing documents last week when the phone calls and text messages started coming in: You have to hear what Tom Allen’s saying in the City Council.
It was December 2, and our fearless aldermen were debating the merits of Mayor Daley’s 2010 budget, which he proposed to balance by dipping into the so-called rainy-day fund generated by parking meter privatization earlier this year. I pulled up the live video stream of the council meeting—thank you very much, Chicago City Clerk Miguel del Valle, for adding this feature to your Web site—and caught the pinnacle of the 38th Ward alderman’s pointed oration railing against, among other things, the meter deal, the use of the reserves, and the overall lack of transparency in how public money is spent. It was a powerful critique of the mayor’s financial management over the past couple years, and perhaps no part of it was as striking as his attack on the city’s TIF program.
After blasting the administration for its “stubborn and obstinate refusal and failure to address TIF reform,” Allen made two specific proposals: he called for a one-year moratorium on TIF subsidies for private companies and he proposed taking one year’s worth of the tax money collected by TIFs—about $500 million—and using it to fix the regular city budget. And he assured his colleagues that it could be done, despite what they’d heard from Daley and his aides.
“Everyone in this room is nervous because we have been told that if anyone messes with the TIFs, you are going to lose your park projects, street projects,” Allen said. “Did the city not exist before? We built buildings without TIFs. It’s all tax money. If you call it an apple or orange it is TIF money. We are not likely to lose this money. We’re playing a game. We are trying to confuse the public.”
Wow. With that one speech, Allen dragged the controversial tax increment financing program out of the shadows and into the spotlight, where it actually became the subject of council debate for a few minutes as mayoral allies like Berny Stone and Patrick O’Connor hurried to defend it as an engine for development. “I don’t know what your problem is with TIFs,” Stone said to Allen. “They’re a great tool.”
In the end, Allen didn’t persuade too many of his colleagues. The council voted 38-12 to pass the budget without the reforms he’d suggested.
But he may have accomplished more for the long term. Allen was so clear, so absolutely fearless, in his willingness to tell it like it is that Mayor Daley might actually have a harder time pretending the TIF program doesn’t end up hiking property taxes for everyone in the city.
In case you don’t know or don’t remember, TIF districts are areas designated by the administration, with the consent of the City Council, where property tax revenue available to the schools, parks, and other taxing bodies is frozen for 23 or 24 years. As property values go up and new properties are built, any new tax revenue—the increment—in these districts is funneled into special accounts ultimately controlled by the mayor. Over the last several years the city’s 160 or so TIF districts have collected a total of about $500 million annually.
Allen says that at a time when the city is so broke it has to lease out its parking meters, garages, and toll roads to cover basic bills, it can no longer pretend that this $500 million-a-year slush fund is magic money that comes out of nowhere. It comes from taxpayers, plain and simple.
“I’m not against TIFs—they are a useful economic-development tool—but I’m just saying we can’t keep on going the way we have been,” says Allen. “I mean, this is not a casual problem we’re facing. We’re in a emergency situation so when you’re in an emergency situation you have to look under the rug, turn over the desk, to find a revenue source that will save that day.”
His passion’s familiar, if not in council chambers. I’ve seen many other citizens—like Ron Ernst up in Jefferson Park, Hugh Devlin in West Rogers Park, and Valerie Leonard in North Lawndale—get worked up as they come face to face with this ongoing charade.
It’s not just that administration officials mislead the public about how the program works—for instance, with the “ABC’s of TIFs” on the Department of Community Development Web site, a gesture of “transparency” that still insists TIFs don’t raise taxes. It’s that until now the City Council has always gone along with it.
Allen’s outburst was a long time coming. Allen was a trial lawyer and aide to 38th Ward alderman Thomas Cullerton, a member of a powerful political family that Allen’s sister-in-law had married into, when Cullerton died in 1993. Daley appointed Allen to finish the term. He’s held the seat ever since. His northwest-side ward has long supported Daley and other machine-approved Dems, and Allen himself has rarely voted against anything pushed by the mayor. On the occasions he’s spoken out in the past—such as when he demanded that the administration hire more traffic cops a few years ago—he’s ended up backing down.
This time he sounds like he’s gearing up for a fight. Allen says he’s always known the TIF program hikes taxes and generates what Cook County assessor Jim Houlihan likes to call the mayor’s “funny money.” Until recently he figured the city could afford an off-the-books slush fund. But when the real estate market collapsed, he started thinking otherwise.
At first he limited his criticisms to offhand remarks at neighborhood forums where he had no reason to think reporters or administration officials were listening—such as the one I happened to attend last year in the basement of a Portage Park church .
“We got this little slush fund called the TIFs just sitting there,” Allen told residents who were there to talk about local school matters. He added that it was time the council start “convincing the administration to have to cut loose this money.”
At the December 2 council meeting, Allen elaborated. “The way I look at it is that we represent people,” he told me afterward. “This is a fiduciary job we have. We’re holding money—hard-earned public money—we can’t be flippant about it. We can’t give lip service. We can’t continue to fool the people.”
Allen swears this wasn’t a political stunt. Despite some buzz to the contrary, he says he’s not gearing up to run for mayor. A four-term incumbent, he says he has no designs on any higher office, though he did run for state’s attorney in 2008, losing in the Democratic primary to Anita Alvarez.
“I’ve never been an ambitious person politically,” he says. “I’m here to be a voice at the table for my constituents.”
Over the last year some aldermen have called on the administration to share more details of how TIF money is spent. But until Allen spoke out, none had used the council stage as a platform to rip the way the TIF program is run. Braver still, he made his remarks when he knew he’d get the attention of Mayor Daley, who famously gets irked when anyone votes against his budget proposal and infuriated when anyone criticizes him in public. Elected officials and office-seekers around here generally avoid saying anything negative about the mayor whether he’s in the room or not—what sense is there in antagonizing the most powerful person in town?
For instance, I don’t know of a single elected official who spoke out against the mayor’s proposals to privatize the Skyway, downtown parking garages, or Midway when they were on the table. And of the five aldermen who voted no on meter privatization, only one, the 32nd Ward’s Scott Waguespack, came out and said it was a lousy deal.
Yet at last winter’s Fifth Congressional election debate, all 11 candidates said they opposed leasing Midway. When I asked some of them why they hadn’t said so back before the deal was finalized, they said it wasn’t their place—it was a City Council thing.
By that same logic, I suppose state senator Barack Obama was out of line to oppose the Iraq War in 2002, that being a White House thing.
In the past, aldermen have told me they’ve gone along with the mayor on issues like TIFs, funding for the Olympics, and moving the Chicago Children’s Museum to Grant Park for fear that he’ll punish them if they don’t. But Allen says so far neither the mayor nor any of his aides has attempted to retaliate for his speech.
“There were some comments from some of my colleagues—mostly positive,” he says. “That’s it.”
The question isn’t whether aldermen in this current council will join Allen in a TIF and budget reform movement—I doubt he’ll find more than a dozen allies. It’s whether candidates in the upcoming election will make it an issue. If, for starters, north-side voters hold aldermen Helen Shiller, Vi Daley, Tom Tunney, Mary Ann Smith, and Eugene Schulter accountable for their unswerving allegiance to this scam, then we’ve made a small step in the right direction. v