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1. MikeT
   Member

   today's Sun Times
   --Keep your eye on the ball and resist temptation.--

   http://www.suntimes.com/news/metro/348869,CST-NWS-tifs19.article

   Study: TIFs too tempting for public officials to resist
   COOK COUNTY | 1 in 4 'saw no significant public or private investment'

   April 19, 2007
   BY ABDON M. PALLASCH Staff Reporter apallasch@suntimes.com
   The average Chicago homeowner pays $93 a year in property taxes to subsidize the network of 373 "TIFs" -- special taxing districts around Cook County, according to a study being released today.
   That's $686 million collected all over Cook County to be spent behind closed doors by elected or appointed officials who generally have little if any public oversight, the study asserted, noting the money is diverted from Chicago and suburban public schools, libraries and parks.

   Other taxpayers make up for that loss, said the study, conducted by Cook County Commissioner Mike Quigley and the Neighborhood Capital Budget Group, working with academics and tax experts.

   Mayor Daley and many suburban mayors say TIFs -- tax increment financing districts -- are the best tool for spurring economic development in "blighted" areas.

   A TIF works this way: A city declares an area "blighted" and it becomes a TIF district. For the next 23 years, any property taxes collected in that district over and above those collected on the first year go into a special pot of money the city will use to "improve" that district.

   But the study says the power TIFs give public officials proves too tempting to resist and they use them in non-blighted areas such as downtown Chicago. A quarter of Chicago's acreage has now been mapped into one TIF or another.

   One in four TIFs "saw no significant public or private investment," the study found. And when property values rise within TIF districts, often it has nothing to do with the TIF designation, according to the study.

   Posted Thursday Apr 19, 2007 19:17 #

2. KimJ
   Member

   Here is a link directly to the Quigley study.

   http://www.commissionerquigley.com/tif.shtm

   Posted Friday Apr 20, 2007 07:56 #

3. Tim
   Member

   From Page 3 of the report:

   "Despite its size, unfortunately, Chicago's TIF program is marked largely by ad hoc
   implementation, weak oversight, scant documentation, vague and confusing financial reporting, and significant barriers to public participation. Political advocates of TIF offer full-throated proclamations of the benefits while downplaying or omitting entirely any consideration of the costs. Information that could form the basis for intelligent criticism of TIF is severely restricted. The controversy over TIF, then, stems not only from the impact of TIF, but from the rather undemocratic nature of the processes that govern it.

   In a properly functioning democracy policies and programs should always be governed by a process characterized by openness, accountability, and community participation, irrespective of their impacts. It is not for the few in power —“ be they politicians, developers, journalists, or “civic leaders— —“ to decide what policies are and are not successful, and only then to choose whether or not to grant the community at large a say in how those policies are carried out. Rather, it is the right —“ and responsibility —“ of the people in whose name and on whose dime government operates to actively participate both in the evaluation of a policy's impact and in that policy's
   implementation."

   Posted Friday Apr 20, 2007 09:12 #

4. spatny
   Member

   You hit it right on the nail, Tim.

   Posted Friday Apr 20, 2007 09:57 #

5. MikeT
   Member

   here is the statement from Commissioner Quigley, from the press release in KimJ's link above:

   “Over the last 20 years, schools, park districts, and other governments in Cook County have lost nearly $700 million in revenue from TIF districts due to inflation, over $100 million in 2005 alone,— said Quigley. “This adds to the incredible financial pressures facing almost every department of our local government. Health clinics have closed, schools are using textbooks held together by duct tape, and open space is not being preserved for the future,— Quigley said.

   and more from the quigley study, which can be found here
   http://www.commissionerquigley.com/library/taleoftwocities.pdf

   (pg 11 of the pdf, or pg iii)

   —¢ It is the worst of times for all other local governments that levy property taxes; they will be
   denied any revenue from property growth in TIF districts until those districts expire.

   It is the worst of times for taxpayers in Cook County, who foot the bill for TIF districts to
   the tune of hundreds of millions of dollars a year yet are provided with very little
   information on their operations, finances or effectiveness.

   from the Executive Summary (pg 9 pf the pdf) ...

   Proponents have called TIF “the only game in town,— implying that municipalities have no other
   economic development tools at their disposal. They argue that TIF allows municipalities to
   finance redevelopment without having to raise property taxes. TIF advocates also point to the
   development within a TIF district as evidence of its effectiveness, arguing that the area would
   have remained un- or underdeveloped but for the use of TIF.

   Critics of TIF call these claims into question. Municipalities, they point out, have created TIF
   districts in areas not suffering from blight, the most prominent example of which is Chicago's
   central business district. Moreover, they claim that TIF does in fact raise property taxes, and not
   only that, but it also harms units of local government, like counties and school districts, that rely
   on property taxes for significant portions of their local revenues. In addition to pointing out TIF's
   potentially detrimental effect on local taxing entities and their taxpayers, critics have found fault
   with the way in which municipalities implement TIF, citing a lack of comprehensive planning,
   weak oversight, poor documentation, and significant barriers to public participation. The
   controversy over TIF, then, stems not only from its impact, but from the processes that govern it.

   We conclude that while TIF may be a useful tool for economic development, criticisms of TIF are
   largely well-founded.

   Posted Sunday Apr 22, 2007 02:03 #

6. MikeT
   Member

   The Sun Times Editorial board also knows that TIFs have problems.

   http://www.suntimes.com/news/commentary/354473,CST-EDT-edits24a.article

   Study shows TIFs are ripe for reform

   April 24, 2007

   In recent years, local governments, especially Chicago's, have relied on tax increment financing districts as if they're a magical and painless solution to their economic development needs. But now a new report from Cook County Commissioner Mike Quigley exposes some of the myths behind TIF districts and recommends some worthwhile reforms. His report should not be ignored.

   When a TIF is created, the city determines the value of all property within its boundaries in the first year. For all taxing bodies, that base is used for the next 23 years to determine their share of the property tax pie, which essentially means their property-tax take is frozen for more than two decades. But property taxes are not frozen -- they increase as the value of property in the district increases. The extra taxes generated by the rise in property value go into a pot that the city uses for development.

   One of the myths of TIFs is that those taxing bodies are not losing money, because property values would not have increased if the TIF hadn't spurred development. But as Quigley's study found by comparing areas within a TIF with those outside a TIF, "there is evidence that a significant portion of the growth taking place inside the TIF districts would have happened even without the TIF, which means that the property tax revenues of local taxing bodies do in fact suffer." Taxpayers suffer too, because dollars diverted to TIFs are dollars that must be collected elsewhere.

   Quigley proposes several reforms. First, he wants the state's TIF laws be changed so that the base year is adjusted for inflation annually, to help taxing bodies keep up with natural increases in their costs. He also proposes requiring an analysis of the effects on taxing bodies before any TIF is created; requiring TIFs to have detailed budgets tying every dollar to a spending goal; requiring TIFs to better account for surplus amounts each year, and requiring all taxing bodies affected by a TIF to have a say on a joint review board that oversees them. He also wants the county's representative on the review board to vote as directed by the County Board. And he would replace Chicago's TIF oversight board, which he says is too much of a rubber stamp for the Daley administration, with neighborhood-level oversight.

   Those and other proposed reforms -- such as making information about TIFs more easily accessible, particularly on tax bills -- should not be seen as anti-TIF. Instead, they are ideas that would improve oversight, temper some of the negative effects of TIF districts and make the process far more transparent.

   Posted Thursday Apr 26, 2007 20:03 #

7. ChrisHajer
   Member

   I guess I wasn't completely insane when I asked about this very thing 4 months ago:
   http://www.riversideinfo.org/forum/topic.php?id=50&page&replies=1#post-497

   Quigley proposes several reforms. First, he wants the state's TIF laws be changed so that the base year is adjusted for inflation annually, to help taxing bodies keep up with natural increases in their costs.

   Posted Thursday Apr 26, 2007 20:08 #

8. MikeT
   Member

   Commissioner Hajer, good observation then. I forgot that important detail about inflation.

   Another reform that the state should consider is making a referendum (minimally a non binding one) a required step in the process since the munipality leaders are doing rather invasive things to each resident's taxes, shifting monies around . It is not just a good idea. It should be law.

   Posted Thursday Apr 26, 2007 20:25 #

9. SharonT
   Member

   My letter to the Landmark (they did not print because there was a similar one)

   On April 17, the voters of Riverside, by their overwhelming voting down of the Village of Riverside 's TIF proposal, showed that they are very perceptive, rational, and educated on the TIF. In other words, they passed the 'TIF final exam' after six months of study. With uncanny timing, just two days after the Vote, on April 19, Cook County Commissioner Quigley published a detailed report on TIFs in Cook County and Chicago that confirmed what the majority of Riverside voters knew - that TIFs imply indirect tax increases, are risky to schools, and are not transparent and controlled. The press release, with a link to the report, can be found at http://www.commissionerquigley.com/tif.shtm

   Posted Thursday Apr 26, 2007 20:30 #

10. Tim
    Member

    What is even sadder is that Mr. McKenna, Riverside TIF consultant extraordinaire, completely understands all of this...including the abusive nature of TIF. It is sickeningly scary to watch him dance around questions directed at the abusive nature of TIF by using verbage that downplays the adverse effects detailed in the Quigley report.

    Sad to think that the misleading, misinformation and misdirection could actually be occurring at Village Hall courtesy of a TIF consultant.

    Posted Thursday Apr 26, 2007 20:51 #

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