On August 4 the five members of the Joint Review Board gathered in a drab, windowless room on the tenth floor of City Hall to consider the LaSalle Central TIF, Mayor Daley’s latest proposed tax increment financing district.
To appreciate the self-destructive effect of this timid behavior, you have to understand the impact TIFs have on the taxing bodies the Joint Review Board members represent. TIFs in Chicago are districts created by the City Council at the mayor’s urging. As a practical matter, they are tax hikes. From the moment a TIF is created until the moment it expires, at least 23 years later, it roughly caps the amount of revenue that the taxing bodies (such as schools, parks, city colleges, county government) take from it. Any additional property taxes generated in the district–through development or even inflation-driven reassessments–go to the TIF. Unless the schools, parks, colleges, etc, are prepared to respond to inflation by cutting back, as the years pass they will find themselves having to raise their tax rates to compensate for the property taxes they are losing to the TIFs. The more TIFs the city creates and the longer they’re around, the more tax hikes they require.
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So far, the city has budgeted only about $550 million of that $2.1 billion predicted by Quigley’s analysis. This suggests a lot of money will be sitting around in an unmonitored piggy bank controlled by the mayor and a few aldermen. Meanwhile, taxpayers face a looming property tax crisis. Over the last several months Cook County has been sending out two sets of notices to Chicago property owners: a tax bill from the treasurer and an assessment notice from the assessor. The hike in this year’s taxes is relatively marginal–about 3 or 4 percent, nothing to be outraged about.
Officially, the board sent its recommendation to the Community Development Commission, another advisory group. The CDC, whose members are appointed by Daley, might ask more questions, but it’s never rejected a proposed TIF. The CDC recommendation goes to the City Council, which gets the final word.
