Public school officials say they’re dismayed that a $20 million budget deficit is forcing them to lay off teachers and teacher’s aides. But they might have an alternative if they’d just stand up to Mayor Daley and demand that he stop siphoning millions of dollars in property taxes away from the public schools every year.
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Early on, municipalities that set up TIFs had to tell the state exactly what they intended to spend TIF funds on, and the state had to approve the plan. But state legislators and administrators long ago dropped their oversight role, and TIF districts are no longer required to be set up in blighted neighborhoods. Chicago now has 131 TIFs–some of them in wealthy areas such as the Loop and Lincoln Park–and they cover nearly a third of the city’s geographic area. According to the city clerk’s office, they sucked up $129 million in property taxes in 2000 and $287 million in 2003 (there are no figures yet for 2004)–all money that once would have gone to fund schools, parks, libraries, etc.
If you live in a TIF district it isn’t easy to figure out how much of your property taxes go to the TIF, because tax bills don’t say. According to the bill for one new building on West Wacker, all of its property taxes pay for city services, including $693,329.87 for the Board of Education and $96,872 for the Park District. The bill also states that $0.00 goes to the TIF. But in fact, all of the building’s $1,419,538.85 in taxes goes to the TIF–and none to schools, parks, or libraries. That’s because the building was constructed on a vacant lot after the TIF was created.
In the meantime, institutions such as the schools are begging for money just to provide basic services. “This doesn’t happen in the suburbs,” says the former alderman. “In the suburbs school boards are generally more independent from the mayors or city councils. They demand some sort of subsidy for diverting tax dollars for TIFs.”
Some City Hall insiders suspect that Daley would be giving the TIF funds to schools as a way to rationalize extending the term of several TIFs, including the Central Loop TIF, which is set to expire in 2008. As the largest and oldest TIF in the city, the Central Loop TIF sucked up about $75 million in property taxes in 2003, and developers are pressing Daley to extend its life and to expand its size in order to subsidize more downtown construction. “It’s so obvious Daley’s going to use the schools as the poster child to extend that TIF–just watch,” says the aldermanic aide. “The schools would be better off if they just said, ‘Thanks, but no thanks. Just get rid of the Central Loop TIF and let us keep our property taxes.’ But who talks to Daley like that?”
