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It was the Park District's annual make-a-wish night at the Loyola Park Field House Tuesday.
That's when Park District officials -- in this case, Brian Loll and Matt Marino -- hold meetings where the little people parade past and tell them what improvements, additions, expansions, or new programs they'd like to see for their local parks.
Before the meeting began, Loll and Marino assured folks that they would take careful notes and convey suggestions back to parks superintendent Tim Mitchell and other Park District big shots, who were preparing next year's budget.
With that, the peasants made their pleas for money to fix floors and roofs, trim weeds, plant gardens, hire staff, restore cut funding, and even, in one extravagant instance, build a swimming pool.
I was hoping someone might suggest the Park District raise money by selling the Streeterville office it bought for $22 million, but that didn't happen. So for me the highlight came when Lincoln Park resident Tom Tresser played a wild card and called for "a sunset on TIFs ."
Pointing out that the city's 160 or so tax increment financing districts divert about $37 million a year in property taxes away from the Park District alone, Tresser said "We wouldn't be fighting for scraps" if the city stopped creating TIFs. "It's our money," he said. The audience clapped, but neither Loll nor Marino said a word. They didn't bat an eye, just took it all down along with the plea for cleaner bathrooms in the Loyola Park field house.
Personally, I'd love to be there were they to bring this suggestion before Mitchell, a former mayoral chief of staff, who knows as well as anyone how the system works: "Uh, boss, you know the mayor's favorite honey pot -- the one that feeds him $500 million a year in property taxes? Well, some nut on the north side wants us to shut it down."
Actually, I have a funny feeling Tresser's suggestion won't make it to Mitchell, much less Mayor Daley. The mayor gets red in the face over relatively little things, like the foie gras debate. The suggestion of a moratorium on TIFs would probably turn him purple.
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Here is the statement, issued July 1 and sent to the aldermen:
With continued budget shortfalls at the City, County and CPS, IVI-IPO calls upon the Chicago City Council to enact a moratorium on creation of any new TIF districts until the City identifies a new funding source to replace the tax dollars that will be diverted to the TIF. We are also asking the City Council to initiate a review of all existing TIFs and terminate those that are determined to have fulfilled their purpose, so their new tax revenue can flow to the individual taxing bodies.
When tax increment financing was first proposed in the early 1980s, it was conceived as an incentive for private investment in blighted communities. Rather than having to draw from current revenue to fund subsidies for developers and businesses, municipalities could promise future subsidies that would be derived from the tax growth which would follow the investment. TIFs in Chicago have long ago strayed from that purpose, and have been designated in prospering residential and commercial areas that do not need to provide incentives for development.
Even in other cases where the goals of the TIF are worthy, the cost of the lost revenue can far exceed the public benefit, such as in the Hollywood/Sheridan TIF. As described in Ben Joravsky's column in the Reader last August, the TIF will cost $75 million dollars in diverted revenue, for a public benefit of $8 million dollars to support affordable housing.
The main weakness in the TIF model is that it really only makes financial sense in an area where property is depreciating or stagnating in value. Assuming the property would have remained undeveloped without the TIF incentives, the taxes would not have increased, so any growth could legitimately be considered "new" revenue and its diversion to the TIF would not result in any loss to general revenue funds. But most property does appreciate over time, even without new investment. It is this natural revenue growth that is lost to the City, County, CPS and other taxing bodies.
As expenses grow with inflation, revenue does not grow at the same pace, because that growth is diverted to the TIF.
If TIFs were designated only in rare instances for very targeted purposes, the loss would be minimal. But one third of the property in Chicago, including some of the most expensive real estate in the city - the central Loop, LaSalle Street Financial District, SearsTower - is in a TIF. The tax growth from rapidly appreciating property owned by our most prosperous businesses is lost to us for years. This is a major factor contributing to the budget shortfalls at the City, County and CPS.
We can not cover the inflationary increase in government expenditures, much less any new budget items, if 1/3 of the property in the city doesn't generate any inflationary increase in taxes. The City Council must start showing some restraint in designating new TIFs.
A TIF should be considered only
· in an area where property is stagnating or depreciating in value as described in Illinois Statute 65 5/11-74.4-3(a)(1)(M) .
· if no other feasible funding source is available to spur investment.
· if a new funding source is identified to replace the revenue diverted to the TIF (this could be achieved by early termination of another TIF).
· until the objective of the TIF is met, at which point the TIF should be terminated and its taxes returned to the general revenue fund.
IVI-IPO recognizes that aldermen have become very reliant on TIFs to procure development and amenities for their communities. Breaking this dependency may be tough but it is imperative for the financial health of our city, schools, parks, county courts and health systems. Funding community improvements should be the responsibility of the entire city and we have confidence that our elected representatives, if they pull together to enforce this fiscal discipline, will also be able to work together to provide for all of our neighborhood needs.
A powerful statement, well done!
THANK YOU!
another category of TIF districts that needs to be looked at with an eye toward dissolving are those that do not have any projects
When citizens have to seek the justice system to intervene between themselves and their elected governments, does this mean that those elected governments are, in fact, criminals?