Clear, Short Explanation Of TIFs – “The Shadow Budget”
Here’s a great introduction to Chicago’s TIF program from The Chicago Bureau by Alex Nitkin.
In the time it takes a Brown Line train to circle the Loop, dozens of secret deals can be made in Chicago. Some walk a blurry legal line, many are done with the common good in mind, and all of them benefit somebody. In the past few years, Tax Increment Financing (TIF) has come to epitomize this universal yet very Chicago practice.
The weight of TIFs’ complexity starts with the very term the acronym stands for. “Tax Increment Financing” sounds like the title of a chapter you’d be tempted to skip in an economics textbook, or the focus of an especially sleepy Ben Stein lecture. But the term stands for a process so hotly controversial – in part for its impact on schools – it’s already become a topic for debate in the 2015 Chicago mayoral election.
TIF is a process by which funding is diverted away from public education and into a network of government-controlled bank accounts, which now hold a combined $1.7 billion while school budgets continue to dwindle. It’s a system that raises public money in some parts of the city to fund private mega-projects in others. It’s an issue at the intersection of income inequality, education reform and government transparency. And it’s a phenomenon seen in Cook County on a scale incomparable to anywhere else in the United States.