written before about how Tax Increment Financing districts (TIF's) have evolved from a strategic tool to redevelop distressed areas of the city to an out-of-control collection of 131 seperate TIF's that accumulate hundreds of millions of dollars in tax revenue every year, siphoned away from general revenues. Now comes this week's Crain's Chicago Business and an article by Greg Hinz that suggests the City of Chicago may be hell-bent on extending the Central Loop Tax Increment Financing district for another 23 years.
Whatever its past problems, no one can claim that the Central Loop District, which is adjacent to Millennium Park, and includes a reinvigorated State Street and a phalanx of new upscale office and condo towers, has any remaining claim to being considered economically challenged, but by now the city has become a TIF junkie, addicted to having those gigantic slush funds to be able to dispense multi-million dollar favors to developers and contractors who will build their projects anyway but have now come to expect large-scale TIF contributions as a gimme. The corruption of TIF's is like the corruption of copyrights - something originally intended for a limited time and defined purpose that high-powered lobbyists have hijacked into a perpetual entitlement.
The irony is that also this week, the city announced that the Chicago Public Schools were raising taxes the maximum amount allowed by law - $55,000,000 - to help plug a massive deficit in next year's budget. By comparison, the Central Loop TIF alone generates nearly $90,000,000 a year. If extended for another 23 year term, that would mean over $2 billion dollars diverted from debt service and basic city services.
Connected developers and contractors get the feast, while the bungalow owners get stuck with the check. Public purposes such as schools, pensions and the CTA face seemingly unending financial crisis even as hundreds of millions of dollars of TIF funds accumulate unspent. This is not sound fiscal management; this is your government on crack. It's as if Grover Norquist, the corporate front ideologue who's made it his mission to destroy the power of government by "starving the beast", has been given the keys to the city.
The outlook will remain ominious unless and until we come to that day when the first big TIF is allowed to expire.