The TIF Report Project From The CivicLab

« TIFs 101 » November 2012 Tom Tresser“Because It’s YOUR Money”TIF 101 1

What are TIFs? • Created by municipality (state statute) • Boundaries cross political and community boundaries • Designed to subsidize some business project or public project that the market won’t support • Captures “incremental” property taxes ABOVE base when district was created • Lasts 23 years TIF 101 2

How Do TIFs Work? TIFs capture property taxes from the district and place them in off-the-book accounts The property taxes collected from properties inside the district BEFORE the district was created that go to units of government stays FLAT for the life of the TIF (23 years). TIF 101 3

Where are TIFs? • All over Chicago and Cook County = 443 • 163 in city of Chicago • Additional 280 in suburban Cook County TIF 101 4

Where are TIFs? TIF 101 5

Where are TIFs?Source: Cook County Clerk TIF 101 6

How Much Revenue Do TIFs Collect?Source: Cook County Clerk TIF 101 7

How Much Revenue Do TIFs Collect?2011 TOTAL TIF REVENUE FOR COOK COUNTYCity of ChicagoTIFs diverted $454 MILLIONSuburban Cook CountyTIFs diverted $275 MILLIONTOTAL FOR 2011 = $729 MILLION TIF 101 8

How Much Revenue Do TIFs Collect? Ouch! $4.5 BILLION DIVERTED SINCE 1986! TIF 101 9

Who Is Harmed By TIFs? ALL units of government that rely on property taxes for their operation – which are STARVED of revenues Forcing them to raise rates, increase valuation and property taxes on your property to make up annual “losses”In Chicago, The Board ofEducation is SUPPOSED to getalmost 54% of your propertytaxes. But… TIF 101 10

Who Is Harmed By TIFs?In Chicago, The Board ofEducation is SUPPOSED to getalmost 54% of your propertytaxes. But…This property owner is in theTouhy/Western TIF District and24% of HIS property taxes werecaptured by the district. TheBoard of Education only got39% of his property taxes.That’s a loss of 15% inrevenues from this singletaxpayer. TIF 101 11

Who Is Harmed By TIFs? TIF 101 12

Who Is Harmed By TIFs? TIF 101 13

How Are TIFs Abused?• Controlled by Mayors with no real oversight• Difficult to determine why they are created• No sound argument for creation – clout driven• Difficult to track how public money spent• Private developers and major corporations getmillions in subsidies• No evaluation or accountability TIF 101 14

TIF for North Side auto dealer is a boondoggle. (Opinion)(cityofficials plans to give Grossinger Auto Group $8.5 million intax-increment financing )Crains Chicago Business – Jan 14, 2008TIF addiction in Chicago reached a new low last week.City officials endorsed a plan to give Grossinger Auto Group$8.5 million in tax-increment financing to build a dealership atthe bustling intersection of North and Clybourn avenues on theNorth Side. The site isnt in a TIF district, but the officials werekind enough to create one just for the building Grossingerplans to convert into a four-level auto mall. TIF 101 15

IN 2009 THE CITY GAVE CHICAGO MERCHANTILE EXCHANGE $15 MILLION FOR REHABBING CORPORATE HQ. APPROVED BY ALDERMAN BOB FIORETTI, 2ND WARD.2009 revenues of $2.6 BILLION! TIF 101 16

CHICAGO PLEADS POVERTY…CUTS SERVICES. CLOSES SCHOOLS. CLOSESHEALTH CLINICS. LAYS OFF TEACHERS. City closed for three week days in 2009… TIF 101 17

November 12, 2012 “Several hundred protesters marched along Michigan Avenue Monday morning to voice opposition to the school closings plan being put together by Chicago Public Schools. Organized by the Chicago Teachers Union and Stand Up Chicago, a coalition of labor unions and community groups, marchers walked from Cityfront Plaza on East Illinois Street to the Hyatt Hotel at 633 N. St. Clair Street, banging drums, blowing whistles and then crowding into the lobby of the hotel where they called on Chicago Board of Education member Penny Pritzker to give back $5.5 million in TIF funding. The CTU and school closing opponents allege that Pritzker, who sits on the board of the Hyatt Hotels Corp., has taken TIF development funds for a new hotel in Hyde Park.”TIF 101 18

THE CITY HAD $1.5 BILLION IN UNSPENT TIFFUNDS AT THE END OF 2010! TIF 101 19

IF THERE WERE NO TIFS, WHAT HAPPENS?TIF 101 20

NO TIFS = YOUR PROPERT Y TAX BILL GOES DOWN BY 11% !!TIF 101 21

Who Is Harmed By TIFs?We ALL are!• TIFs divert almost one billion dollars in propertytaxes in Cook County every year.• TIFs are a tax on everyone – regardless if youlive in a TIF district or not.• TIFs starve the units of government that relythem for operation.• TIFs are notoriously corrupt and difficult totrack. TIF 101 22

Cook County Clerk David Orr joins teachers and neighbors at a TIF protest on 3/19/11Cook County Clerk David Orr issued a press release onNovember 23, 2009 and called for a moratorium onnew TIF districts until a new Mayor is in place and athorough review of existing TIFs is conducted.“Too often, Chicago’s policy has been to collect millionsin a piggy bank and decide how to spend it later,” Orrsaid, “Now the city is plugging its budget hole with TIFmoney but TIFs were not created to be a safety net whenthe economy went sour, The TIF system is broken and itneeds to be fixed.” (see http://tinyurl.com/6dsabkc) TIF 101 23

Mayor is “Shocked”! The Chicago Sun-Times (5/25/11) reported that "Without criticizing Daley directly, Emanuel said he was ‘shocked’ to learn that TIF districts have been multiplying for more than two decades without any job creation standards." TIF 101 24

The Problem Is State-Wide In Illinois, 360 municipalities have 943 TIF Districts? In 2010, across the state, 414 TIF districts were in “non-compliance” for not filing any or proper financial statements, according to The Office of the State Comptroller. That’s 44% of all Illinois TIFs! TIF 101 25

The TIF ReportWill Shine A Light on TIFS! TIF 101 26

We Need The TIF Report To Shine A Light on TIFS!Phase 1 – Prototype• Pick one ward to fully investigate TIF history and activity• Create maps to show districts• Reveal all parties and organizations who have receivedTIF funds from those TIFs inside ward• Publish results on line and in tabloid form (usingChicago Reader as model)• Work with small team of Citizen Journalists to gatherinformation TIF 101 27

First ward selected for investigation = 27th Ward, Near North Side – 12 TIFs TIF 101 28

We Need The TIF Report To Shine A Light on TIFS!Phase 2 – Expand• Add three wards to add geographic diversity• Add one suburban township• Create maps to show districts• Reveal all parties and organizations who have received TIFfunds from those TIFs inside ward• Publish results on line and in tabloid form (using ChicagoReader as model)• Train, expand team of Citizen Journalists to gatherinformation TIF 101 29

We Need The TIF Report To Shine A Light on TIFS!Phase 3 – Scale• Extend coverage to all 50 wards• Recruit and train Citizen Journalists for extended suburbanCook County coverage• Build and deploy web tool that allows taxpayer to enteraddress and get TIF impacts• Publish annual atlas of all Chicago and Cook County TIFswith revenue histories TIF 101 30

We Need The TIF Report To Shine A Light on TIFS!Beyond Cook County and IllinoisAccording to The Illinois State Comptroller, there are TIF districts in 355municipalities across the state. There is no easy way to determine exactly howmany TIF districts there are. The Comptroller’s Office also publishes a list of TIFdistricts who have failed to comply with the law requiring proper and up-to-datereports. The “FY 2010 TIF Non-Compliance Report” dated February 15. 2011 listsan astonishing 414 TIF districts who have not filed required reports. (Seehttp://tifreports.com/wp-content/uploads/2011/02/2010-State_TIFNonComplianceReport.pdf )Beyond this, we see our work as having national significance since TIF programsare currently present in 48 states. Dan McGraw, an author and reporter based inFort Worth, and who has written extensively on TIFs, is ready to become our firstorganizer-editor outside of Illinois. (Seehttp://reason.com/archives/2006/01/01/giving-away-the-store-to-get-a)We are looking at billions of property tax dollars here. Every year. In every state. TIF 101 31

The TIF Report TeamPublisher & Editor-in-Chief – Tom Tresser Tom has been organizing in Chicago since 1990. He was a lead organizer of No Games Chicago in 2009. In 2010 he was the Green Party candidate for Cook County Board President. He has been teaching classes on civic engagement at local universities for six years. He has done leadership training sessions in seven states. He is a strong advocate and practitioner of distributed democracy and citizen journalism. TIF 101 32

Helping you do democracy @civiclabchicagoTom Tresser – 312-804-3230 – tom@civiclab.usAlpha version of web site = http://tifreports.comGet TIF Tips and other news of distributed democracyand citizen journalism via Twitter = @TIFreport TIF 101 33

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The TIF Report Project From The CivicLab

by Thomas Tresser on Nov 12, 2012

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