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David Orr

David Orr

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Renewed Call for a TIF Moratorium

Posted: 04/ 8/11 05:14 PM ET

Back in November 2010, when I called for a moratorium on new Tax Increment Finance (TIF) districts in Chicago, the race for Mayor Daley's successor was barely underway. Since then, TIFs have become a regular part of the political debate.

Now, Mayor-elect Rahm Emanuel has turned his scrutiny to TIFs. Aldermanic candidates became TIF skeptics. Unions like the Chicago Teachers Union have become vocal about the hundreds of millions of dollars siphoned off into the TIF slush fund, holding protests and making demands of TIF fund beneficiaries. And, as they have for years, the Chicago Coalition for the Homeless continues to press for a Sweet Home Chicago ordinance to designate TIF funds for affordable housing.

These are important demands. Managing the resources tied up in old, current and new TIFs will be one of the most significant factors in how Chicago deals with its financial crisis. We must enter a new era. For too long, TIFs were used as corporate subsidies, disproportionately benefiting the few at the expense of the many. And because the expenditures were a foregone conclusion, there were vague budgets, little transparency and even less accountability.

With so many voices crying out for change, where should we start? Since 1986, more than $4 billion has been collected from all TIFs in Chicago. There are over 158 active TIFs in the city. Such a vast system must be scrutinized systematically. That is why, when I called for a moratorium in Chicago, I laid out a specific set of goals and steps relevant to both old and new TIF districts.

  • First, there must be a review of existing TIF districts to ensure that all surpluses are distributed.
  • We must require future TIFs to have itemized project goals.
  • Development plans should be itemized rather than written with vague generalities, letting observers track expenditures. Otherwise it is impossible to know whether or not a project is complete and therefore if a surplus can be returned to the taxing bodies.
  • We must reform the TIF budget processes to include TIF revenues and expenditures and continue TIF transparency efforts.


And finally, TIF districts must not be treated as separate fiefdoms somehow divorced from municipal budgetary discussions. When political leaders were crying poor in recent years, the City of Chicago's TIF districts were awash in a half billion dollars in cash.

So, I repeat my call for a moratorium on TIF districts in Chicago. We have far too much at stake in our city to allow TIF money to be poorly used or misused. We must leverage TIFs to invest in areas with genuine blight, to alleviate poverty, develop middle-class jobs and throughout, to be accountable to the taxpayers.

 

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