More calls for using TIF dollars to shore up deficit-riddled budgets

More calls for using TIF dollars to shore up deficit-riddled budgets

It’s budget season in Chicago, and the numbers aren’t pretty: The operating deficits for Chicago Public Schools and the city’s next spending plans are $712 million and $636 million, respectively.

School administrators are trying to close their gap “by collecting $150 million more in property taxes, making programmatic and administrative cuts, laying off supplemental teachers and pulling from reserves,” Catalyst reported last week. Mayor Rahm Emanuel is seeking work-rule changes from the city’s unionized workforce and is pursuing the privatization of some services as fixes, and the full extent of how his administration will solve the budget crisis for 2012 is yet to come. He has said the city faces a fiscal “moment of truth” and must make “tough choices.”

With cuts looming, some organizations are trying to put in the spotlight the money the city collects through its Tax Increment Financing District system but hasn’t found a use for.

TIF districts freeze the amount of property taxes various governmental bodies in Cook County collect from the properties within the district for up to 24 years. Any dollars collected above the frozen amount are reserved for economic development projects within the district. The program is meant to spur development in blighted communities.

A group of parents organized as the Raise Your Hand Coalition says the city has some $867 million in TIF dollars that have not been allocated for any specific development project.

Earmarking all of that money as surplus–ex-Mayor Daley decided to designate $180 million in TIF dollars as surplus to patch together his last budget–would raise millions for the schools, advocates are arguing. Here’s what Raise Your Hand Coalition member Sonia Kwon said at a recent CPS budget hearing:

[W]hen I heard about the proposal to increase property tax without even a discussion of using unallocated TIF as a possible source of revenue, I was flabbergasted.  Chicago currently has a TIF balance of almost $1.5 billion dollars and of that $867 million is unallocated*.  TIF money is our property tax dollars.  For every dollar of property tax 53.5% is for CPS, so in my basic math $464 million of the unallocated $867 million would have gone to CPS. In these times of job losses and foreclosures, how can the city justify increasing property tax when they are holding onto $867 million unallocated funds and will collect another $450 million in TIF this year alone? Why is this money from our property taxes untouchable?

Meanwhile, the Grassroots Collaborative, whose members include community organizations and some local unions, demanded the Emanuel administration declare at least $200 million in unallocated TIF dollars as surplus.

The collaborative is folding the demand into a broader campaign that targets TIF “corporate welfare.” At a demonstration outside of the Chicago Mercantile Exchange building in the Loop this morning, public school students sat in desks set up along West Monroe Street, protesting the $15 million TIF deal the exchange and the city put together in 2009 (but have not yet finalized).

That money, members of the Grassroots Collaborative said at today’s rally, should instead go to support schools in need and school staffers facing layoffs.

Asked for comment, exchange spokeswoman Anita Liskey wrote in an email that grant was part of a merger between the mercantile exchange and the Chicago Board of Trade. “It was one component during the competitive bidding process for the Chicago Board of Trade with an out of state rival to keep the exchange industry as a vital part of the Chicago community,” she said.

Emanuel, however, ruled out using TIF funds for the next CPS operating budget in an online chat yesterday with the Better Government Association.

“The TIFs are one time. They don’t solve the problem. They don’t deal with the problem. Next year, we’d be back at it like Groundhog Day,” Emanuel said during the chat.

© Community Renewal Society 2011

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