2014 TIF Analysis

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August 14, 2015 [2013 Analysis] [2012 Analysis]

CITY HAD $1.44 BILLION IN PROPERTY TAXES IN TIF ACCOUNTS ON JANUARY 1, 2015

A review of the 2014 annual reports of the City’s 150 Tax Increment Financing Districts by volunteers with the TIF Illumination Project revealed some startling facts about local government finance.

The total fund balance at the end of 2014, that is, all property tax dollars sitting in TIF accounts was $1,442,450,590 (a decrease from the $1.71 billion left in TIF accounts from the year prior). The TIF Illumination Project has issued a Freedom of Information Act request to both the Department of Planning and Development and the Office of Budget and Management to secure definitive documentation on the status of these funds. The mayor’s office claims most of it to be “reserved for future development” or obligated to pay existing debt incurred by existing TIF projects.

A wide array of civic actors, including the Chicago Teachers Union, Raise Your Hand for Illinois Education, affordable housing advocates and organizing efforts such as the Grassroots Collaborative have called into question Chicago’s official budget pronouncements of red ink and service cuts. Citing the staggering amount of property taxes being held in TIF accounts, these groups, as well as the editorial boards of local newspapers, have called for a complete accounting of these funds.

Other findings of our analysis of Chicago’s TIF districts for 2014 include:

• Total Property Tax Increment extraction for 2014 = $425,634,435 (an increase from 2013 of $26.1 million or 6.5%) This is the amount of property taxes extracted by Chicago’s TIF districts and diverted from local units of government that rely on property taxes for their operation. 56% of Chicago property taxes are SUPPOSED to go to the Chicago Public Schools.

• 80 TIFs take at least 50% of property taxes collected inside their borders. 22 extract at least 90%. 4 will actually collect 100% (another 3 take 97% or more).

• The Top Ten TIFs collected a total of $215.1 million in property taxes in 2014. These are the “champions” in terms of property tax extraction. The Number One TIF = Near South, collected $56.5 million in 2014. This TIF was cancelled in 2014.

• Total expenditures from Chicago’s TIFs in 2014 were $638.3 million. This represented an increase from 2013 of $265.4 million or 71%) This is how much all of Chicago’s TIF districts spent in 2014. The biggest spender was the Near South TIF with $102.3 million. $28 million will go to subsidize the development of the Marriot’s Hotel on the McCormick Place campus. $53.2 million went to the Board of Education for the Jones College Prep High School. $11.6 million went to the CTA for construction of the new Cermak Road Green Line station.

• Total revenues transferred INTO TIFs = $127.6 million. This was how much revenue was placed INTO TIF accounts from other TIFs.

• Total “surplus” revenues from TIFs distributed to local government sources was $37.7 million. In total, $166.3 million of TIF funds were moved around the city.

• The Top Ten TIFs in terms of fund balance were holding $555.2 million in property taxes on January 1, 2015. The TIF with the largest fund balance was the Canal/Congress TIF holding $66.3 million.

• In 2014 these seven TIFs were terminated: 45th/Western, 95th/Stony Island, 134th St./Avenue K, Kostner Avenue, Near South, Roosevelt/Homan and West Pullman.

• Chicago’s 31 expired or repealed TIFs have collected $2.02 billion in property taxes, including a staggering $986,767,890 from the Central Loop TIF which expired in 2008 and $694,223,201 from the Near South TIF which was cancelled in 2014.

• Four new TIFs came online in 2014: 51st/Lake Park, 107th/Halsted, Foster/California and Washington Park. The Washington Park TIF was created despite studied and strenuous objections from residents in the community.

• For the first time the TIF Illumination Project looked at the financing costs associated with Chicago’s TIF districts. In 2014 20 TIFs used property taxes to pay a total of $98,644,025 in finance charges to two banks. The Amalgamated Bank of Chicago was paid a total of $66,340,798 from 10 projects. Wells Fargo Bank was paid $32,303,227 from 10 projects.

• The Department of Planning and Development extracted $8,822,046 for staffing costs from 91 TIFs. This might be called “skimming the skim.”

The most striking number was the finding that over $1.44 billion in property taxes was sitting in TIF accounts on January 1, 2015.

The Top Ten TIFs by property tax collection for 2014 were:

Top 10 TIFS Extraction

 

 

 

 

 

 

 

The Top Ten TIFs by fund balance in 2014 were:

Top 10 TIFS Fund Balance

 

 

 

 

 

 

 

The Top Ten TIFs by expenditures in 2014 were:
Top 10 TIFS Expenditures

 

 

 

 

 

 

 

The TIFs that collected NO property taxes in 2014 were:
TIFs no collections 2014

 

 

 

 

 

 

21 TIFs extracted 90% or more of property taxes in their boundaries in 2015:
TIF extracting al least 90percent-2014

 

 

 

 

 

 

 

 

 

 

 

Hundreds of millions of property tax dollars continue to move around the city, from one TIF into another and are sometimes distributed to local units of government.
2014 TIF transfer-1

2014 TIF transfer-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014 TIF transfer-3

Here are the TIFs that have been repealed or terminated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The TIF research was coordinated by Lead Organizer Tom Tresser. Tom is a long time educator and organizer and Public Defender in Chicago. He was the co-founder of the CivicLab with Benjamin Sugar – America’s only co-working space dedicated to collaboration, education, fabrication and innovation for social justice and civic engagement. The CivicLab operated for two years in the West Loop and closed on June 30, 2015. In 2008 he was a co-founder of Protect Our Parks which sued to stop the privatization of Lincoln Park. In 2009 he was a co-organizer of No Games Chicago which worked to defeat the bid for the 2016 Olympics.

The Research Coordinator for our 2014 analysis is Amy Beth Schoenecker, a Ph.D candidate in Political Science at the University of Illinois at Chicago. Our chief TIF Illuminators for this analysis were Liz Alejo, Pilar Amado, Nari Ho, Hsuan-Hui Hu, Yo Chi Lin, Kinga Pecak, Merle Tresser and Jack Wangelin. Over the past two years dozens of volunteers and interns pitched in at various times to help with a wide variety of research, mapping and graphic projects.

The TIF Illumination Project is online at http://www.tifreports.com. It has been all volunteer project up to now that has been revealing the impacts of TIFs at the ward level. We show how much property taxes are extracted from inside each ward by the TIFs IN that ward. We produce graphic posters that contain a map of the ward showing:

• The shapes of all TIFs that are in the ward
• How much revenue those TIFs took from properties just IN the ward
• How much revenue FROM the ward was left in the in-ward TIF accounts at the end of the year
• Who has received TIF funds inside the ward
• Any schools being closed or experiencing recently announced budget cuts
• How much money was transferred in our out of these TIFs
• How much money the Department of Planning skimmed from these TIFs for its own use

The TIF Illumination Project distributes these graphic posters at TIF town meetings, or Illuminations, that have been independently organized by residents of the community. Since February of 2013 we have investigated and Illuminated 141 TIFs across 32 wards before over 4,400 people. Our heartfelt thanks to the dozens of volunteers who help organize these meetings.
TIP poster-flier-meeting
The complete record of these is online at http://tifreports.com/tif-town-meetings. Presentations from these meetings can be purchased at our TIF Data Store at http://www.tifreports.com/store.

We have produced two TIF training videos via crowdfunding campaigns. “TIF 101” (22 minutes) explains the basics of Tax Increment Financing and features Professor Rachel Weber from the University of Illinois at Chicago and Cook County Clerk David Orr. “TIFs Off the Rails – Public Policy Problems with Chicago’s TIF Program (17 minutes) features Professor Richard Dye of the University of Illinois and Professor Stephanie Farmer of Roosevelt University. These videos are available on YouTube at http://www.tifreports.com/training_videos.

This TIF analysis was made possible by the many donors to our summer 2015 crowdfunding campaign. Thank you!

VoqalAlthough the CivicLab is closed we gratefully acknowledge the support of the Voqal Fund which helped keep the CivicLab going over the past two years and thus provided a base for the TIF Illumination Project to do its work.

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