On June 15 Mayor Daley brought public school officials and aldermen to a south-side grammar school for a revival meeting of sorts. The ostensible purpose of the press conference was to announce the mayor’s plans to spend $1 billion over the next six years to build 24 new schools in neighborhoods across Chicago. But Daley and the other officials made a point of reminding people of the economic development plan that makes this possible: the tax increment financing program.
According to the city, as much as $600 million, or 60 percent, of the new construction costs will come from various TIFs, districts created by the City Council that put a rough cap on the amount of property taxes that go to the schools, the parks, and the county for a period of 23 years. Additional property taxes generated in these districts through rising assessments and new development flow into TIF accounts, which function as virtually unmonitored slush funds.
Best of Chicago voting is live now. Vote for your favorites »
local resources” (i.e., property taxes) to raise the target amount. “If districts are too poor to raise the foundation level though property taxes, the state makes up the shortfall,” explains Rachel Weber, an associate professor of urban planning at UIC and an expert on public financing. “As the property tax base decreases, or if it stays the same as the number of students increases, the amount of state aid increases. This is how the state compensates poor school districts.”
In the long run the strategy is counterproductive. School officials should be clawing for every nickel they can get. Instead they’re going along with a system that diverts tax revenue from education and, even factoring in the state’s largesse, leaves a strapped Board of Education 30 percent poorer than it would be if there were no TIFs. Meanwhile our tax bills continue to mount–many of us can expect our property taxes to rise as much as 50 percent after this year’s assessment. And of course TIFs do nothing to help the CPS address its chronic shortage of operating cash. While Daley boasts of his plans to “assure that our children learn in modern, up-to-date environments,” Duncan and his board have proposed raising $55 million by hiking property taxes to the maximum allowed by the state, threatening increased class sizes and teacher firings as the alternative.
