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Taxpayers can't afford more TIF districtsCrain's Chicago BusinessNovember 5, 2007EditorialIt's time to take TIFs off the table. A city facing fiscal woes so severe that Mayor Richard M. Daley wants to raise taxes $300 million a year can't afford to forgo any more revenue. Tax-increment financing, the mayor's favorite development tool, puts millions of dollars worth of property tax dollars off-limits for many purposes. Originally conceived as a way to jump-start depressed neighborhoods designated as TIF districts, the mechanism sets aside for reinvestment in the TIF district all increases in property tax revenue generated by properties in the district. Those dollars can't be used for other city needs, like building schools or making pension payments to retired police officers and firefighters. Taxes outside the TIF zones often rise to meet those obligations. TIFs in Chicago also squeeze Cook County, whose government is proposing its own massive tax hikes. TIFs have served the city well over the past couple of decades, helping revitalize areas like the North Loop. But today, about 30% of the city is covered by 156 TIF districts that locked up nearly $380 million in property tax revenue in fiscal 2006, the latest year for which data are available. In recent years, the mayor's use of TIFs has become more questionable as it seems to stray from its intended purpose of luring developers into areas they would otherwise avoid. For example, much of the Loop and environs are covered by TIFs. This despite the historic boom in residential and commercial construction that's made downtown Chicago a 24-hour-a-day, seven-day-a-week neighborhood that cities around the world try to emulate. Now the mayor wants to make a TIF out of LaSalle Street, the core of Chicago's financial district. Does anyone really believe developers will abandon the central business district without city subsidies? If ever there were a place to let the market take its natural course, this is it. With taxpayers across the city and county facing whopping hikes, the city can't afford to keep giving special breaks to a lucky few.
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