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Chicago is one of the most extensive users of TIF in the country, with more than a third of the city included in the program. Year by year, the share of property tax revenue that pours into TIF districts keeps growing, increasing by nine percent since just 2017, according to a report released earlier this year. In 2021, about forty percent of the nearly $3.02 billion in property tax revenue went to TIF.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Nice of you to ask. 1. Never believe TIF lifespan is 23 years. Pilsen is one more example of rubberstamp Springfield 12- year extension to 35 years, contemptuously ignoring pleas of resident taxpayers. 2. To understand TIF, imagine if every property in a taxing district were granted TIF designation, and TIF incremental tax payments were remitted back to each individual property owner for 35 years (to cure their own blight). Year 1 after reassessment: Let’s say no development occurred, but inflation has caused a 5% increase in property value. Let’s say the EAV was $1million the prior year and so… Read more »
Thanks, Susan. I think many WP commenters, including myself, are weak on understanding the effects of TIFs, but you help to explain them.
It took me quite some time to understand, at least a little, this complicated-by-design corruption-finance-facilitation-mechanism called TIF. I think many corrupt practices in Illinois could be combatted by examining/advocating for equal treatment for all. That is: if an area is blighted, let each property owner bear the personal risk of development (since he will personally enjoy all the rewards if it works out). Therefore declare the whole municipality within TIF, raise no public debt which burdens fellow citizens, and give incremental p-tax payments back to the property which generated the assessment increase. Of course, property tax rates would skyrocket to… Read more »
To me a TIF fund is a political slush fund to hand out to the politically well connected. How many TIF’s have not achieved the desired purpose they were intended for? Here in Rockford there are many TIF districts but with declining property values except for the last 2 years the values at inception are still basically the same. So increased EAV with the money allocated never materialized to hopefully lower tax rates. A few TIF’s helped a little but not too much.
The reason TIF is “needed” to spur development seems primarily to be high property tax rates. (Development can rarely be profitable in areas with 3% p-tax rates when all over America, developers can find alternative project sites where p-tax rates ~1%).
TIF always raises p-tax rates, as a function of simple math: the numerator (levy) always rises with inflation, while the denominator (taxable EAV) is frozen in part, artificially low relative to the growth of numerator.
Therefore, TIF is a mechanism which always exacerbates the problem which justifies its own existence: high p-tax rates.
It’s time for an insightful comment from Susan, and I’m not being sarcastic.
TIF kinda rhymes with GRIFT.