2015 TIF Analysis

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More information: Tom Tresser, 312-804-3230, [email protected], @tomstee

July 22, 2016

CITY HAD $1.36 BILLION IN PROPERTY TAXES IN TIF ACCOUNTS ON JANUARY 1, 2016
TIF ILLUMINATION PROJECT PROVES IT’S A SLUSH FUND

A review of the 2015 annual reports of the City’s 146 Tax Increment Financing Districts by volunteers with the TIF Illumination Project and In These Times revealed some startling facts about local government finance.

The total fund balance at the end of 2015, that is, all property tax dollars sitting in TIF accounts was $1,355,453,630 (a decrease from the $1.44 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 Chicago Budget Director claims most of it to be “reserved for future development” or obligated to pay existing debt incurred by existing TIF projects.

However, the response to our FOIA requests proves that the money left over in Chicago’s TIF accounts amount to a massive slush fund that can be used at the Mayor’s discretion. For the full trail of our requests and the city’s responses, see http://www.tifreports.com/slush-fund.

A wide array of civic actors, including the Chicago Teachers Union, Raise Your Hand, 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 2015 include:

  • Total Property Tax Increment extraction for 2015 = $353,428,926 (an decrease from 2014 of $72 million or 17%) 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. 50% of Chicago property taxes are SUPPOSED to go to the Chicago Public Schools. [Note: Our figures are taken from the City of Chicago’s 2015 TIF Reports, found at
    http://www.cityofchicago.org/city/en/depts/dcd/supp_info/district-annual-reports–2015-.html and differ from the total number issued by the Cook County Clerk’s office on July 19, 2016 at http://www.cookcountyclerk.com/newsroom/newsfromclerk/Pages/2015TIFReport.aspx. The city’s reports reference calendar year 2015 while the Clerk’s office are using formulas for the tax year that is being billed and collected in 2016.]
  • The Number One TIF in terms of property tax extraction for 2015 was the Chicago/Kingsbury TIF with $23,490,058. This TIF was also Number One in terms of its ending balance, with $84,679,405.
  • 24 TIFs extracted at least 90% of ALL property taxes collected inside their boundaries.
  • The Top Ten in terms of ending fund balance were: Chicago/Kingsbury, Canal/Congress, Near North, Kinzie, Central West, River West, LaSalle/Central, Pilsen, Chicago/Central Park and River South. The combined fund balance for these ten TIFs at the end of 2015 was $577,824,746.
  • Total expenditures from Chicago’s TIFs in 2014 were $336.5 million. This represented a decrease from 2014 of $301.8 million or 47%) This is how much all of Chicago’s TIF districts spent in 2015.
  • The biggest spender was the Chicago/Central Park TIF with $28,816,038. $14.1 million was for the Westinghouse High School and $11.9 million was for finance charges to the Amalgamated and Wells Fargo Banks related to bonds issued to pay for the Modern Schools Across Chicago project back in 2007 and 2010. Number Two was the 24th/Michigan TIF with $22,901,623. $4.3 million was for the National Teachers Academy, $3.4 million for Chinatown Public Library and $5.3 million for Michigan Avenue streetscape projects and $3.5 million for the Wells/Wentworth Connector Project. Number Three was the Calumet/Cermak TIF with $20,915,793. $20.1 million went to the Metropolitan Pier and Exposition Authority to develop the Marriott’s Hotel next to the new DePaul Arena.
  • Total revenues transferred INTO TIFs = $47.3 million. This was how much revenue was placed INTO TIF accounts from other TIFs in 2015.
  • Total “surplus” revenues from TIFs distributed to local government sources was $39.6 million. In total, $84.3 million of TIF funds were moved around the city in 2015.
  • In 2015 these seven TIFs were terminated:  Galewood/Armitage, 45th/Western, 95th/Stony Island, 134th/Avenue K, Kostner Avenue, Near South, Roosevelt/Homan, West Pullman.
  • 19 TIFs showed NO PROPERTY TAX INCREMENT: Michigan/Cermak, Ogden/Pulaski, Hollywood/Sheridan, Little Village, Armitage/Pulaski, Avondale, Harrison/Central, West Woodlawn, Archer/Western, Harlem, Irving Park/Elston, Little Village East, Pershing/King, Foster/California, Calumet River, Chicago Lakeside, 67th/Wentworth, 51st/Lake Park, 107th/Halsted.
  • A total of 32 TIFs have been terminated through 2014. These TIFs extracted a total of $1.97 billion during their lifetimes. For a list download->cancelled-chicago-tifs-by-number
  • The TIF Illumination Project looked at the financing costs associated with Chicago’s TIF districts. In 2015 14 TIFs used property taxes to pay a total of $49,890,206 in finance charges to The Amalgamated Bank of Chicago and the Wells Fargo Bank. Amalgamated received $28,978,256 while Wells Fargo received $20,911,950.
  • The Department of Planning and Development extracted $8,253,905 for staffing and administration costs from the TIFs it administers.  This might be called “skimming the skim.”

The most striking number was the finding $1.36 billion in property taxes was sitting in TIF accounts on January 1, 2016.

The Top Ten TIFs by property tax collection for 2015 were:

Chicago/Kingsbury $23,490,058
Canal/Congress $23,073,689
Kinzie $19,207,188
Near North $19,050,436
River South $17,108,874
River West $15,022,272
Central West $14,218,506
LaSalle/Central $13,585,366
Pilsen $10,513,921
Calumet/Cermak $8,878,935

These 24 TIFs extracted at least 90% of available property taxes:
At least 90 percent

The Top Ten TIFs by fund balance in 2015 were:

Chicago/Kingsbury $84,679,405
Canal/Congress $80,386,129
Near North $67,243,001
Kinzie $64,157,714
Central West $57,247,846
River West $54,263,073
LaSalle/Central $46,746,487
Pilsen $44,427,379
Chicago/Central Park $40,009,037
River South $38,664,675

The Top Ten TIFs by expenditures in 2015 were:

Chicago/Central Park $28,816,038
24th/Michigan $22,901,623
Calumet/Cermak $20,915,793
Pilsen $17,101,877
Near North $16,034,197
LaSalle/Central $14,842,468
Central West $14,056,617
71st/Stony Island $8,813,036
North Branch North $8,494,240
River South $8,241,100

The TIF research was coordinated by Lead Organizer Tom Tresser (www.tresser.com). Tom is a long time civic educator 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 (www.civiclab.us). In 2008 he was a co-founder of Protect Our Parks which sued to stop the privatization of Lincoln Park (www.protectourparks.org). In 2009 he was a co-organizer of No Games Chicago which worked to defeat the bid for the 2016 Olympics (www.nogameschicago.com).

The research for our 2015 analysis was conducted by a team of interns at In These Times, an independent nonprofit magazine dedicated to advancing democracy and economic justice (www.inthesetimes.com).

Over the past three 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 a mostly volunteer project 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 33 wards before over 4,700 people. We have presented at 47 public meetings!

Our heartfelt thanks to the dozens of volunteers who help organize these meetings.  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.

Although the CivicLab is closed we gratefully acknowledge the support of the Voqal Fund which helped keep the CivicLab going from 2013 through 2015 and thus provided a base for the TIF Illumination Project to do its work.

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