Chicago’s TIF Dollars Pinned Down

The Chicago Reader has put together an impressive expose on how and where tax increment financing (TIF) money has been spent over the last few years. The TIF program was created to help blighted areas that wouldn’t otherwise attract economic development support. Using information compiled through a Freedom of Information Act request, the Reader broke down the spending ward by ward.

While areas like West Englewood received $33,000 in TIF funds between 2004 and 2008, the 2nd, 27th and 42nd Wards—those that encompass the city’s central business district—shared roughly $626 million of the total $1.5 billion spent in that time, or about 43 percent.

The TIF program has become one of the main sources of funding for basic infrastructure improvements, but it seems not all wards enjoy these benefits. And poor areas aren’t the only ones being left out; middle-class bastions like Chatham, Beverly and Rogers Park don’t get much investment either.

The Reader’s breakdown found that about a quarter of all TIF spending, or $358 million, went to a single ward, the 2nd, an area defined by the Loop and the near south and west sides. This accounts for more than the bottom 35 wards received altogether.

The TIF program works by freezing property taxes for a span of time—usually 24 years—and if property values there rise, the extra money goes into an escrow account. The higher the property values in the district, the fatter the TIF account grows. The city has created TIF districts in “blighted” portions of the Loop, such as the LaSalle Street financial corridor, the gentrified near west and south sides, Wicker Park and even Lincoln Park. As property values in these areas climb, they generate more income.

By contrast, if a poorer community fails to increase in property value, no number of TIF districts can aid it. And any extra tax revenue that might have been collected and spread around the city from, say, the Loop stays in the Loop. The administration’s reliance on TIFs as the city’s main economic development program results in rich neighborhoods getting more investment and poor neighborhoods receiving less.

Visit The Reader for a more complete breakdown of where TIF dollars went.

South Works Planned Developement Set for TIF Infusion

The Chicago City Council may once again turn to controversial tax-increment financing (TIF) to help pay for the redevelopment of the years-dormant South Works property. On Tuesday, the Council’s Community Development Commission voted unanimously in support of pledging $96 million to finance the first phase of a massive overhaul of the former U.S. Steel plant on the city’s south side. If approved by the full Council, the South Works TIF would be the City’s largest ever subsidy of private development.
Read More…