The Fullerton/Milwaukee Tax Increment Financing district is raking in so much in property taxes that city officials have managed to spend only half the money. Yet they now want to expand the district and rake in even more. “How can they take more money if they haven’t spent the money they have?” asks Carter O’Brien, who lives in Logan Square just outside the district.
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According to the county clerk’s office, which keeps track of these things, the area that’s covered by the Fullerton/Milwaukee TIF district generated about $4.1 million in property taxes in 2000. It generated $6.7 million in 2003, so $4.1 million went to schools, etc, and the extra $2.6 million went into the TIF fund. Over the past four years a total of about $6 million has gone into the TIF–money that would otherwise have gone to fund schools, etc.
What did the planning department, the main body deciding what TIF funds get spent on, do with the $6 million? According to city documents analyzed by the Neighborhood Capital Budget Group, a not-for-profit watchdog, the department set aside about $700,000 for grants to unnamed merchants who wanted to fix up their properties, and it earmarked another $2.45 million for the construction of a shopping strip at California and Armitage (there’s no indication whether that was in loans or grants). It’s not clear what, if anything, has happened to the remaining $3 million.
When the state created the TIF program back in the 80s it enacted very specific guidelines. TIFs were intended only for “poor and blighted” communities that weren’t going to get much private investment without one. Municipalities that set them up had to be very specific about what the money they took in was funding, and the state had to approve the projects. But state legislators and administrators long ago diluted those rules. A TIF district no longer needs to be poor and blighted–there are now TIFs in some of the city’s wealthiest areas, including Lincoln Park and the Loop. There’s no longer any requirement that the city reveal exactly how it plans to spend TIF money or that the state approve a project.
On January 3 the department held a public meeting on the expansion. About 50 people showed up and barraged officials with questions. “They kept telling us that this was really a matter of just correcting the TIF, just putting in properties that should have been included in the first place–as if that was going to reassure us,” says O’Brien. “From their perspective, the whole city should have been included in that first TIF. I kept asking, ‘Why are you expanding the TIF if you don’t know what you’re doing with the old one?’” He was told the department was still looking at ideas.
