In his November 11 op-ed in the Chicago Tribune, Mayor Daley once again assured us he’s doing everything he can to protect us from a tax hike in these tough times.
“Because people are struggling, I decided against increasing taxes of any kind,” Daley wrote.
Apparently, as hard as I’ve tried to explain it—and I’ve tried really, really hard—Mayor Daley just can’t grasp how this property tax thing works, particularly in relation to tax increment financing, his favorite economic development program.
Every time the mayor gets the City Council to create a new TIF district, he effects a hike in everyone’s property taxes.
And now the mayor is gearing up to extend the tax-devouring capabilities of four of the city’s existing districts. This summer he apparently convinced Governor Pat Quinn and the Illinois legislature to add 12 years to the 24-year life span previously allowed by state law. That’s 12 more years of higher property taxes.
As I’ve explained many times, once a TIF district is created it essentially freezes the amount of tax revenue the schools, parks, county, and other taxing bodies get from it for up to 24 years. Any new revenue is diverted into the TIF fund, which is effectively controlled by the mayor with little oversight or transparency. Tax rates for the schools, parks, county, and other taxing bodies then have to be raised to compensate for the money pulled into the TIF accounts—thus producing a tax hike. Get it, Mayor Daley?
No? Here’s another simple way to look at it: in each of the last several years the TIFs have collected about $500 million. That’s money forked over by taxpayers on top of what they’ve paid to the city, county, schools, and parks.
Extending the life of a TIF district requires approval by the state legislature and the governor. Until last spring they’d never done it before in Chicago, though they’ve done it many times for suburban and downstate communities.
You’d hope that in these calamitous economic times, Governor Quinn, house speaker Michael Madigan, and senate president John Cullerton would feel compelled to hold hearings and engage in debate before effectively raising Chicagoans’ property taxes. But you’d hope in vain.
Back on February 13, state rep Kevin Joyce introduced a bill to expand the kinds of materials open to the public under the Illinois Freedom of Information Act. On April 3 that bill passed the house and was sent to the senate, where it sat in committee for weeks. Legislators tell me that during that time city lobbyists got in touch with their allies in the senate, and on May 18 Senator Don Harmon gutted the bill, removing the language about the FOIA and adding an amendment that extended the life of the four Chicago TIF districts: Madden/Wells, Roosevelt/Racine, Stony Island/Burnside, and Englewood Mall. None of these fall into Harmon’s legislative district.
Harmon—who didn’t return calls for this story—is from Oak Park, whose TIF policies seem to be almost as nutty as Chicago’s, hard as that is to believe. (Hardly a week goes by without some Oak Parker calling and asking me to write about one TIF debacle or another.)
On May 29 the state senate approved the bill 46 to 5 and sent it back to the house, where south-side rep Marlow Colvin signed on as chief sponsor. (He didn’t return calls either.) Two days later, at the end of spring session, the house approved it 89 to 28. Governor Quinn signed it into law on August 28.
In other words, when it comes to Mayor Daley’s favorite slush fund, Cullerton, Madigan, and Quinn can be every bit as accommodating as our rubber-stamp City Council. They weren’t alone, of course. Twenty-five Republicans in the house and 14 in the senate voted for the TIF extensions, including senators Bill Brady and Kirk Dillard—both of whom are campaigning for governor on a platform of standing up to Chicago Democrats.
Predictably, Chicago’s Democratic legislators voted for the extensions with the exception of north-side reps Harry Osterman and John Fritchey, who’ve apparently learned a lesson from recently elected Congressman Mike Quigley: it’s not such a bad idea for a north-side politician to oppose a few TIFs if he wants to advance his career.
According to Osterman, retrofitting bills is a favorite end-of-session tactic for lawmakers looking to pass legislation without much scrutiny or debate.
“I don’t want to say it’s an end run, but it’s not uncommon for bills at the end of the session to have a gut replacement,” says Osterman. “The challenge is that a bill doesn’t get a thorough review.”
In this case, Osterman says he doesn’t remember if there was any debate. “It came up for a vote on the last day of the session, which is a very challenging day. We had the budget and the campaign finance bill. Honestly, there might have been one or two questions about this, but that’s it. If you want to avoid a lot of debate on a bill, May 31st is a pretty good day to have it come for a vote.”
Harmon’s legislation doesn’t specify what the city can or should do with the 12 extra years of property tax dollars the TIFs will collect under this unusual extension. A spokeswoman for the city’s Department of Community Development said she’d try to find out and get back to me. Four days later, she did, saying the additional years of TIF money will be used to finance CHA redevelopment on the near west side, help Finkl Steel move from Lincoln Park to the south side, and give the much delayed Englewood Mall project a jump-start.
These are probably more appropriate uses of TIF funds than some of the stuff the mayor comes up with, such as the recent $35 million handout to United Airlines. As the TIF program goes, this might actually be progress.
Now You Can Find Out How Much You’re Paying Into Your Local TIF
I’m always ripping into politicians for looking the other way or misleading the public about Mayor Daley’s great TIF scam.
So I feel obligated to give some credit to Cook County clerk David Orr for shining some much needed light on the impact TIFs have on property taxes.
As you may know by now, the annual TIF take—the amount the program diverts from schools, parks, and other taxing bodies—is concealed from the general public because it’s not reflected on property tax bills. If you live in a TIF district your tax bill shows a line item of $0. If you don’t live in a TIF district your bill doesn’t mention the program at all.
In 2006 Mayor Daley successfully thwarted an effort by former Cook County commissioner Mike Quigley to show the TIF take on tax bills. But this month Orr took a small but significant step toward TIF truth telling by adding a new search to his Web site.
Step one: Choose a piece of property, such as Chicago Public Radio’s neighborhood studio at 2531 W. Division. (OK, someone at the station asked me to look it up.)
Step two: Go to the Cook County assessor’s Web site (cookcountyassessor.com) to find the property index number, or PIN, for that address.
Step three: Go to the TIF section of Orr’s site (tif.cookcountyclerk.com) and type the PIN into the search engine, which TIF geeks call the TIF-o-meter. You’ll learn that the studio is in the Humboldt Park Commercial TIF district—and that 68 percent of its tax bill goes into the TIF account, compared with 16 percent for the schools, 7 percent to the city and its library fund, 3 percent to the county, 2 percent to the park district, and 2 percent to the water reclamation district.
Step four: Go to the Cook County Treasurer’s site (cookcountytreasurer.com), hit the link for property taxes, and punch in the PIN to find out how much Chicago Public Radio’s landlord pays in taxes. From there you can figure out what the percentages mean in actual dollars. In this case, the radio station’s landlord paid $2,750 this year into the TIF, $647 to the schools, and so on.
Is this fun or what?
The day I discovered Orr’s TIF-o-meter I spent the better part of an afternoon looking up everyone from Mayor Daley (92 percent of his tax bill goes to the New South TIF) to Congressman Bobby Rush (68.5 percent to the Bronzeville TIF) to the Willis Tower (12.2 to the LaSalle Central TIF).
And this little game is catching on. Angela Caputo, a reporter for the Progress Illinois blog and TIF geek if there ever was one, posted an item about Daley’s tax bill. Whet Moser linked to her piece on the Reader‘s blog, folks started passing it around, and the next thing you know guys on my bowling team were looking up properties.
Hey, as long as we’re spending all this tax money on the TIFs, we might as well get some entertainment out of it.