Chicago Aldermen Want a Brighter Light on City’s TIF Spending
A specter is haunting Chicago City Hall-the specter of transparency for the city’s massive Tax Increment Financing (TIF) program
Last month two city aldermen—Manny Flores and Scott Waguespack—introduced a resolution to create an on-line TIF disclosure system that gives easy access to project budgets and actual spending ( including financing terms, dates, amounts, recipients and purpose) and that includes both weekly payroll data and periodic job creation reports for TIF districts.
Flores and Waguespack introduced the legislation after they tried to get employment and other data for the Republic Windows factory, which had been occupied by laid off workers protesting the company’s attempt to cheat them out of severance pay and health benefits.
The aldermen wanted the data to determine if the city should retrieve its subsidies for the Republic factory, which was closed in favor of a lower-wage site in Iowa. Chicago government had provided $9.5 million in TIF assistance for the plant, based on Republic’s pledge to create and maintain over 600 jobs until 2019.
That even members of city council have to struggle to get basic TIF data comes as no surprise. Chicago Reader reporters Ben Joravsky (since the Neighborhood Capital Budget Group’s demise the most trenchant critic of city TIF abuse) and Mike Dumke described in almost farcical terms the bureaucratic delays and incomplete data that met their own request for the same employment data.
In Illinois, TIF districts are created for areas designated as “blighted.” Increased property tax revenue from development (the “increment’) in a TIF district is reserved for further economic development in the same district for as long as 23 years (sometimes longer), rather than shared among local taxing authorities like schools and park districts.
However, in Chicago TIF has become an all-purpose business incentive benefiting companies and developers in areas that are already affluent, like the city’s Central Loop. According to Cook County Clerk David Orr, since the 1980s city TIF districts, which now number about 160, have diverted about $3 billion in revenue. The Daley Administration now controls what critics call a $550 million TIF “slush fund.”
In a city where reform measures are often DOA, the resolution introduced by Flores and Waguespack at least produced a March 16th public hearing before the City Council’s joint economic development and finance sub-committee. Speakers supporting the sunshine resolution included Professor Rachel Webber of the University of Illinois-Chicago, a nationally noted TIF expert, who cited Minnesota’s requirements for TIF disclosure, and community development consultant Valerie Leonard, who described how the city TIF documents currently posted frequently contain blank pages, and how TIF job creation data for North Lawndale, a depressed but developing community with seven TIF districts, was unavailable.
Unintended comic relief was provided when the city planning department’s deputy commissioner touted (via online demonstration) the TIF data already provided by the city. His presentation backfired when the only data he could pull up was outdated. When questioned about other data that had been available on-line, he admitted it had been removed. Dan O’Neil, an expert on making government data publicly available in usable formats, offered to construct a city TIF disclosure website for free.
Although no one testified against the reform measure, Alderman Margaret Laurino, the chair of the economic development subcommittee chair, tabled it: “We want people to have access to information, but we don’t to overwhelm them…It’s something we don’t want to rush into.” The comment from the Chicago Sun-Times, which supported the TIF sunshine measure, was apt: “This from a City Council that can approve a $1.2 billion deal to lease the city's parking meters after about an hour of debate “
Fake concern over drowning policy wonks with complete data aside, Laurino’s action represents the “business as usual” deference to the Mayor, who successfully blocked efforts to subject TIF beneficiaries to the reporting requirements of Illinois’ 2003 subsidy disclosure law. But with ‘transparency” an increasingly powerful theme on the state and national level, Chicago officials and citizens may be less willing to be kept in the dark.