Chicago has long endured damage to its budget from Tax Increment Financing (TIF)
chicanery
. But with Mayor Rahm Emanuel pledging to take on
TIF reform
, change may be afoot. A new
report
released today by the Illinois Public Interest Research Group (PIRG) demands better transparency and accountability for TIF in Chicago. This includes incorporating TIF into the city’s budget process, linking spending to economic development plans instead of political patronage, requiring better outcomes, measuring outcomes, utilizing clawbacks for failure to meet benchmarks, and ending TIF districts once the economic development goal has been achieved. Much of what PIRG is asking echoes suggestions made by a panel appointed by Mayor Emanuel that studied the city’s
TIF problems
. Many of these recommendations have not yet been implemented.
In response to PIRG and other
criticisms
, Mayor Emanuel has pledged an improved transparency
portal
, better than the one we
discussed
last May, which was already a vast improvement.
And yesterday, to our surprise, recipients of major TIF subsidies have decided to return
$34 million
to the city. These recipients include the Chicago Mercantile Exchange (CME), CNA Group and Bank of America. CME’s subsidies were enabled by a controversial new state law. It’s not clear exactly why these recipients are choosing this particular moment in time to return subsidies, but
reports
indicate that shortfalls on job creation pledges and negative publicity may have played a role.
With 10 percent of Chicago’s revenues tripped up in TIF spending, it is clear that Chicago needs more transparency and accountability on TIF.