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New report blasts use of TIF districtsDaily SouthtownApril 20, 2007By Jonathan LipmanCook County Commissioner Mike Quigley is readying himself for another quixotic push against popular economic development legislation by arguing it amounts to a hidden tax that isn't very effective. "It's much like any carnie game," said Quigley (D-Chicago). "No one knows, collectively, how this money is spent." He was talking about tax increment financing districts, a complicated piece of tax legislation popular with mayors looking to bring in new businesses. There are at least 373 of them in Chicago and the Cook County suburbs. Once a property is included in a TIF, if the property's value increases, any property tax money generated by that increase goes into the TIF fund and not to the city, county or schools. TIF funds are then used for infrastructure improvements or economic development inside the district. As Quigley points out, municipalities can and do move money outside the TIF districts to neighboring districts. And often the money is used not to build sidewalks and schools, but as cash giveaways to big companies. Quigley has been trying since September to get TIF laws changed to create more transparency on how municipalities spend TIF money and give other governments a greater say in the process because they are frozen out of property tax growth inside TIF districts. Quigley hopes the new class of Chicago aldermen will show some interest in the issue, and he's trying to drum up support now by issuing a 49-page report calling for an overhaul of TIF legislation. "None of this is ever a revolution, it's always an evolution," Quigley said. "Last time, I had Republicans calling me up from downstate saying they'd look at it. So we're building." Among the report's findings is a study of whether the TIFs do what they're supposed to: boost development. The report compares property values in areas that are in some of Chicago's TIFs with values in similar areas that are outside the districts. In 40 percent of the TIFs analyzed, the report says, property values have grown slower inside the TIF than outside. Chicago planning department spokeswoman Connie Buscemi disagreed with the findings. "Since its inception, TIFs throughout the city have generated over $8 billion in private investment," Buscemi said. "That's investment that probably would not have happened without the benefit of TIF." Among the reforms sought is an honest accounting on tax bills of how much TIFs are costing residents in property tax. Because it diverts property tax money away from other governments, every TIF forces city, county and school governments to raise tax rates on everyone else to compensate. In Chicago, TIFs raise the average homeowner's tax bill about 4 percent each year, the report says. "This amount -- is the TIF tax," the report says. "Every taxpayer in Chicago -- whether he or she lives within a TIF -- pays the TIF tax."
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