The Armies Are Gathering (Chicago)

[Hannah Bell]

There must have been more than 100 people—most of them parents of Chicago Public Schools students—sitting in the auditorium of a south-side grammar school last week and talking about radically reforming Mayor Daley's tax increment financing program....members of Raise Your Hand are demanding that Mayor Daley and schools CEO Ron Huberman change the TIF program right now.

It's a pretty audacious request from an outfit that didn't even exist a few months ago. The group consists of parents from across the city who banded together in April after Huberman announced that a deficit approaching $1 billion would force him to fire hundreds of teachers and raise maximum class size from 30 to as high as 37...To understand what they're proposing, you need to understand how the program works.

The amount people pay in property taxes is determined in part by the assessed value of their property. After the City Council, at Mayor Daley's urging, creates a TIF district, it basically freezes the level of property tax revenue that the schools, the parks, the county, and all the other taxing bodies can divvy up from that district for up to 24 years. If property in a TIF district increases in value during that time, the extra tax revenue goes into a special account controlled largely by Mayor Daley.

The schools, which count on property taxes to fund 37 percent of their budget, see none of it. So when they need more money, they have to raise their tax rate—or make cuts, or ask the state for more help, or all of the above. Last year about $250 million that without TIF would have gone to the schools was diverted into TIF accounts...

http://www.chicagoreader.com/chicago/tifs-chicago-public-schools-cps-school-funding/Content?oid=1984315

[Greyhound]

1. For change, this seems very like the same old scam.

Imagine a Daley creating a slush fund by stealing it from those with no recourse, what a surprise.:eyes:
:kick: & R

[Robbien]

13. This scam has been going on for decades and decades

TIF funds are an institution around here. Institutionalized corruption.

[Tierra_y_Libertad]

2. "No one's life, liberty, or property is safe while the legislature is in session."

Mark Twain

[HereSince1628]

3. Doing things requires money, doing things = power, politic ans seek power

It isn't surprising at all to me that a political office holder under any party would be motivated to control funds and particularly to gain control of funds that have discretionary spending associated with them.

Successful tenure in office requires an absence of rebellion, and keeping the proletariat happy requires buying bread, and putting on good shows at the coliseum and the circus. Politicians need to control money to do that.

So I expect politicians to maneuver to control money and the manner in which it is spent. Competing agendas over what tax money should be spent on is the push-pull of all modern societies.

[mopinko]

4. so 100 people should decide to undo an effective program that serves

the city well? I would like to see more transparency, but if these whiners think there would be a higher pie without an economic development tool should think back to the days of jane byrne. the tax base was collapsing in on itself. that's why tiffs were invented.
they should look around.

[Hannah Bell]

5. "served the city well" if you're in the top 10%.

[mopinko]

6. served the city well if you don't want to live in bombed

out slums. served the city well if you don't want to see the building next to yours torched because all the people fleeing the city leave buildings half empty and financially unsustainable. served the city well if you think that you would rather see diverted taxes go to street scapes, parks and parking, libraries and schools instead of vacant buildings bringing in no taxes, and whole neighborhoods go down the drain.
that is the reality. i live here. i see it. nobody is served by a hollowed out city with no one with enough income to pay taxes to keep everything moving. no goose no golden egg, you know.
for all the hysteria about "slush funds" (hmm, where have i heard that before?), the money has been well spent on a city that is beautiful, that has expanded public spaces, that has built and expanded schools, libraries, police and fire stations, that has revived ghetto neighborhoods, that has developed walkable neighborhood, brought farmers to the city, moved toward a greener city, and a whole lot more.
you see, we are democrats here. we run our city like good democrats. and you know what? our economy here is in good shape. not untouched. but still pretty good. without solid democratic leadership all these years, we would be circling the drain. but we are not.
ritchie daley is a good man, who loves his city, who knows what makes a good city and what makes a bad city, and who puts that ahead of money and friends in the main. he won his last election with 70% of the vote. do you get that? maybe 100 people in some church basement think some rich people took their money from them. but that 70% of the voters think otherwise.

so, do you get it? you are bashing one of the most popular and effective democratic elected officials in the country on a democratic message board. your dog can't hunt.

[KonaKane]

7. This same person wants the public saddled with billions to bail out smokers

bad habits instead of tack on a modest cig tax.

I am mystified too.

[Hannah Bell]

9. "modest" -- lol. cigarette taxes are raised everytime any goverment needs money.

where i live, they're over 1000% of the price of the good.

[KonaKane]

12. as they should be.

And your statistic is disingenuous. The "price of the good" you are citing is obviously cost, not what the consumer pays.

[Hannah Bell]

16. your post is disingenuous.

i understand.

"tax the poor"

[dionysus]

20. not every poor person is stupid enough to smoke...

:shrug:

[Lagomorph]

17. Interestly...

Some Indian tribes, who traditionally trade in tobacco, insist the tobacco taxes are racist. They disproportionally harm tribal economies.

If you talk about the actual costs to bring the product to the market, taxes are far, far higher than 1000%. Tobacco companies can cigarettes, profitably, in third world countries for 1/5 the price Americans pay before taxes. I haven't looked at the numbers for a few years, but the last time I checked, breakeven was around $2.50 per carton.

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

22. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Hannah Bell]

32. ...

[Hannah Bell]

15. uh-huh. sure.

The document also says that TIFs are created and run in an open process, when in fact the program is well hidden from the public—even if you live in a TIF district, how much you're paying into the TIF fund isn't even itemized on your tax bill.

It says TIFs are "used to encourage development and investment where it would not otherwise occur," but in fact the money largely goes to wealthy neighborhoods—like the Loop....not to mention that the schools overall are actually losing money thanks to TIFs).

It says the approval of TIFs is closely monitored, but in reality oversight is limited to a rubber-stamp board filled with mayoral appointees who know better than to ask hard questions...So who are this year's big losers? Poor residents of neighborhoods like Garfield Park, Lawndale, Englewood, and the near west side. My initial analysis shows that when the tax bills come out, any day now, those folks will be looking at tax hikes as high as 100 percent...

http://www.chicagoreader.com/chicago/tifs-for-dummies/Content?oid=999741


And as this week's cover story points out, TIF money isn't reaching many of the neediest parts of the city. In fact, Chicago's economic disparities may even be widened by the program.

From 2004 to 2008 the city spent about $1.5 billion through the TIF program. The three wards downtown—the 2nd, the 27th, and the 42nd—received about $626 million, or 43 cents of every dollar spent. The rest was divvied up among the other 47 wards, with some of the neediest getting almost nothing.

The 27th Ward, which covers much of the near north and near west sides, has been one of the biggest winners in the TIF game—the city spent about $240 million in TIF funds there between 2004 and 2008. The infrastructure improvements TIF money paid for included new sidewalks, decorative street lamps, planning for a proposed new Green Line station at Lake and Morgan, and (above) a new traffic signal at Washington and Aberdeen, right next to Oprah Winfrey's production facility.

http://www.chicagoreader.com/TheBlog/archives/2010/05/20/where-tif-dollars-go-and-where-they-dont


Then there's the pork for corporations & businesses, e.g.:

TIF $$ for wall street types -- & tishman speyer, international real estate

The Daley administration is proposing to give a $2.3-million public subsidy to start-up trading firm Nico Holdings LLC, which plans to more than triple its staff, from 79 to 254, over 10 years. Chicago-based Nico, owned by trader Peter J. Meyer, is more than doubling its space, to 32,420 square feet, as part of a move from 311 S. Wacker Drive to 222 W. Adams St., where it has signed a 12-year lease. The subsidy includes a $350,000 job training grant and a $1.95-million tax-increment financing grant, according to a report by the Department of Community Development. Construction of the space is expected to cost $10.15 million. The Community Development Commission is expected to review the subsidy request Tuesday. New York-based Tishman Speyer Properties L.P. owns 222 W. Adams, part of the Franklin Center complex.

http://www.chicagorealestatedaily.com/cgi-bin/news.pl?id=38487

TIF $$ for yuppie restauranteurs:

http://www.suntimes.com/business/2343144,CST-NWS-roeder02.article



MillerCoors recently affixed its logo to the riverfront side of the building at 250 S. Wacker that, thanks to $6 million in TIF subsidies (and another $18 million in state tax breaks), houses the beer giant's corporate headquarters.

Let's not forget that the CME Group, a publicly traded corporation with a value of around 20 billion dollars that has historically touted free market approaches in association with people like Milton Friedman, got 15 million to rehab substandard office space in the Chicago Board of Trade Building that they lease to other firms. They originally wanted 40 mm while they laid off former CBOT employees after the Chicago Mercantile Exchange and CBOT merged. They claim, of course, that this will create jobs. Thanks a lot, Ald. Smilin' Bob Fioretti!



And the ever-popular "moving the poor elsewhere," or "economic cleansing":

The Daley administration has also repeatedly used TIF funds to move poor people out of gentrifying areas. For example, at Monroe and Green there's a glittering condo building with a sign in front advertising "unobstructed views." Up until 2006 a homeless shelter stood there. More than $2.5 million in TIF money was used to demolish the shelter, run by the Chicago Christian Industrial League, and move the agency to an impoverished area on the west side: the new facility is at Roosevelt and California, across the street from a grammar school.

(A friend of Daley's was the beneficiary...built the condos).

http://www.chicagoreader.com/gyrobase/the-shadow-budget-who-wins-in-daleys-tif-game/Content?oid=1848124&storyPage=2

The city also used the TIF program to get rid of a homeless facility in the gentrifying South Loop. In 2006, after a seven-year court battle with the owner of the New Ritz, an SRO hotel at 1007 S. State, the city bought the building and told residents they had to move elsewhere. About a hundred of them were given $475 apiece in TIF funds to help them on their way. The property is now vacant. So far all this has cost taxpayers more than $2 million in TIF money.

http://www.chicagoreader.com/TheBlog/archives/2010/05/20/where-tif-dollars-go-and-where-they-dont



meanwhile, daley's pleading poverty with a billion dollar slush fund & laying off city workers & school teachers.

the corruption is thick enough to drown in.

it's certainly clear why some people like tifs. especially when they were an untallied secret.

[proud2BlibKansan]

11. Let's hear it for gentrification!

Rah Rah

[mopinko]

18. it is preferably to decay

i have seen both. i will take an economy that thrives over a city that is collapsing under it's own weight.

[proud2BlibKansan]

23. Dupe

[proud2BlibKansan]

24. It's not like these are the only alternatives

I think kicking low income folks out of their neighborhood is a cruel alternative.

[mopinko]

26. and i think that is a pov that is

unsupported by my experience, so there you go. government is about the area where people need to act together. keeping the city from descending into a sinkhole is one of them. nothing is static in a big city. it is either going up or down, so, those really are the only options.

fyi, tif money in my hood was recently used to help keep a large apartment building that was falling into disrepair from ending up as condos.
this whole program started in the uptown neighborhood, which was really decaying around the beautiful old homes that once made it a very stable and desirable place. former mayors really had no tools available to them to invest in these places. that neighborhood now is full of fancy condos where fire traps once stood. but there is also a great deal of clean safe housing that is affordable. (anything done with city money, or with a variance to zoning must make 10% of units affordable.)

many of those 'homes' that poor people live in are dangerous both to them and the buildings around them. we either have to draw a line, or accept tin shacks on vacant lots, and spreading squalor. many mayors in the past did not want to do that. zoning was enforced completely haphazardly. these days it is not. dangerous buildings are shut down. for EVERYONES good.

[izzybeans]

31. Great examples.

btw.

Glad to hear about them.

[izzybeans]

21. I think its the use and choices made with the funds that is troubling.

Mayor Daley has far too much control over TIF funds. We have a beautiful lake shore, however other areas of our city are severely neglected. I can see why various segments of our city would not understand the role TIFs have played historically. A little reform wouldn't hurt... I don't think.

[mopinko]

27. i see change for the better in every neighborhood i visit

even places like austin are nothing like they were pre-daley. please point to a specific use of funds with which you disagree.

[izzybeans]

28. The grossinger example in 2008 from the article is one.

That area was already a big box corridor with little residential space. Not sure one of the areas biggest car dealers actually qualifies as being a public improvement project. If I were in a meeting discussing this project as part of TIF, I'd tell them to look for money elsewhere because they were five years too late to the game.

I think TIFs have been a fine approach, but I understand completely why people in many neighborhoods do not trust how the money is allocated. It all appears like insider games from the standpoint of the community. If you and I had a business idea that would transform the landscape of our neighborhood, no way we get our hands on that money (or at least that is the impression most people have). Unless you happen to know the Mayor, and if you do, maybe we can meet, 'cause I have a few ideas I'd like to run by him. :)

My opinion of TIF is that it 95% positive and the other 5% is that it could be done more effectively with better planning. I think TIFs should be reinvested across area boundaries. As of now, it appears that doesn't happen (or not enough). There are all sorts of interesting models of economic development that could be experimented with through all those TIF funds. I couldn't find the article I was looking for but this one will do. More critical than I would be, but its close enough I guess. As it stands, inequalities just get reproduced neighborhood to neighborhood. TIF could be the answer to the riddle all those social scientists have been trying to solve about Chicago for so many years.

http://www.nbcchicago.com/news/local-beat/TIFs-For-The-Rich-78957542.html

[mopinko]

29. 'Professors never built nothin'

not that professors are bad, but a lot of times, they don't really grip the outside world.

but from the article-
That blows a hole in the economic development theory of, say, pouring money into areas like downtown at the expense of neighborhoods because the tax revenue generated - from tourists, for example - can then help the whole city. Not if the most affluent TIF districts keep the money for themselves. That's why TIFs were designed to be used in blighted areas, not wealthy districts (or for corporate subsidies, which is another Daley favorite).

ok, money generated by tourists does go into general accounts. sales taxes and property taxes on the many, many businesses that are built on tourist dollars go into the general coffers.
and as far as it being corporate subsidies- this comment makes me want to discount the whole article, since the intent of the whole program is corporate subsidies. if you don't get that, you don't know what you are writing about. fine for the run of the mill complainer to say, but don't get paid to write something and not get the idea AT ALL. writer is very confused.

[izzybeans]

30. Very true about tourists going into general accounts.

However, if I took that $8 million that went to Grossinger and instead packaged it up into $100,000 start up funds for 80 budding entrepreneurs in let's say Austin, Humboldt Park, Avondale, and Chatham, the impact would be far greater. And the money would have gone directly to people who actually live in the neighborhood where their businesses exist. Not only would tax dollars come from those businesses directly, but the consumption dollars from the owners and employees would do so as well.

TIF isn't flexible enough to do that, as far as know. Big investments in outside businesses coming in are fine and necessary, but for it to have any impact on the very large social inequalities between our different communities we need to change it up a bit.

[hedgehog]

8. I think this scenario is playing out in every state legislature and

city, town or county government in the country. When the top 1% controls 30% of the wealth in this country and the bottom 80% only controls 20%, setting up an equitable tax system is just about impossible.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

[Mithreal]

14. Not impossible, there has been pushback. In OR recently and WA

will have a ballot measure this year to tax high earners.

Not impossible.

[cali]

25. It's not playing out here.

[leftstreet]

10. K&R

This is the kind of news we need to see on the teevee 24/7.

Excellent article!