‘Sweeping’ TIF Changes … But Are They Enough?

Three letters – TIF – have been at the core of criticism over how Chicago steers tax dollars toward particular neighborhoods and developers. As a candidate for mayor, Lori Lightfoot was among those critics.

The Lightfoot administration on Wednesday rolled out an initial set of changes to the tax increment financing system.

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TIFs quarantine property tax growth within the borders of a district, and put the money toward development within the district rather than dispersing it to schools, the park district and other units of local government that would normally receive that funding.

The “sweeping reforms” to Chicago’s approach to TIFs will “bring more transparency, accountability and equity to the system in terms of how public dollars are administered,” said Samir Mayekar, deputy mayor for economic and neighborhood development. “I would consider this as chapter one of what will be a narrative around reforming the TIF system.”

Among the changes:

The city will publish a TIF guide every year and TIF spending decisions every month to a “new, user-friendly” version of an existing web portal. A new TIF Investment Committee, headed by Mayekar and comprised of other top Lightfoot staff, including the budget director, comptroller and chief equity officer, will make equity the foremost concern when reviewing potential TIF spending.

The initial rollout makes stricter and more public how the city will review and administer TIF money; later iterations will be geared toward changing how Chicago designates and terminates TIF districts.

Chicago uses TIF more extensively than conferrable-sized cities, said Rachel Weber, with the University of Illinois at Chicago’s College of Urban Planning and Public Affairs, to the point that developers of large-scale projects have come to expect it.

“It’s become hard to put the genie back in the bottle,” she said.

She praised Lightfoot’s changes as a “good way of advancing” reforms that started under Lightfoot’s predecessor, Mayor Rahm Emanuel.

“It’s doing a lot to advance issues of transparency and disclosure – the city’s going to make a lot more information available and so people like myself and journalists and community organizations are going to have at their fingertips a lot of useful information where for years we’ve been unable to trace those money trails,” she said. “And just knowing that there’s such attention in City Hall right now to trying to push TIF allocations in a more equitable direction and to push them further into areas like the South and West sides that have not been able to attract as much private investment, I think is very heartening.”

But there’s a lot more to be done, Weber said.

The Civic Lab’s Tom Tresser, who runs the website endtifsnow.org, said the notion of TIFs paving the way toward equity is “a cruel joke,” given that by their very nature they “hoard the money in the wealthy communities … and they starve the poor ones.”

“TIFs cannot be reformed. They have been and will remain a slush fund controlled by the mayor,” he said.

The Chicago Teachers Union issued a statement taking Lightfoot to task for introducing the TIF overhaul without having consulted community groups and stakeholders.

“If the mayor is truly serious about TIF reform, she should sunset downtown TIF districts early, which would return $400 million annually for schools, parks, libraries, the city budget and other projects,” the CTU said.

Follow Amanda Vinicky on Twitter: @AmandaVinicky

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