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Chicago's TIF program: The gift that keeps on taking

Mayor Emanuel delivers another $457 million to the scam his predecessor created.



As Cook County clerk David Orr released his annual TIF report last Thursday, an otherwise typical week was under way in Mayor Rahm Emanuel's Chicago.

The police department announced that overtime costs continue to rise, in part because the city is too broke to add officers, despite another gruesome summer of murders.

At the same time, principals at schools throughout the city searched their depleted budgets for money to pay for such luxuries as librarians and toilet paper—even though the mayor just closed 50 schools on the grounds that doing so would save millions of dollars for operations.

And all the while, Mayor Emanuel moved ahead with his plans to spend $55 million in property tax funds on a basketball arena for DePaul University as well as a new hotel. The Chicago Plan Commission is expected to rubber-stamp the deal this Thursday.

Wait—I want to make sure no one took my wallet while I was writing that.

Just to remind you: tax increment financing is the program in which the mayor jacks up property taxes in the name of things you want—like schools and police—but then spends the money on things you don't want, like the basketball arena for DePaul.

He does this under the guise of eradicating blight in low-income communities, which wind up receiving a relative pittance of the TIF money.

Every year Clerk Orr produces a report in which he tells the world just how much money the TIFs are taking.

It's an annual event that, among other things, leaves the Chicago Tribune's editorial board with a soul-searching existential dilemma: Will we write about the mayor's ongoing $457-million-a-year game of three-card monte? Or will we continue to look the other way and, instead, call for more school closings and cuts in teachers' pensions?

Orr's report makes it clear that real money is involved. This year the TIFs will tax us $457 million. In the last 25 years, we, the taxpayers, have paid $5.5 billion into the TIF program. If the TIFs weren't around to siphon off the money, at least $3 billion of it would have gone to the schools and another $1 billion would have been available for city services like policing.

That means that the biggest losers in this program continue to be the clueless chumps of Chicago, who keep electing the mayors and aldermen who rob them blind. Take your trophy, voters—maybe the mayor will honor you with a celebration rally like the one he threw for the Blackhawks.

Speaking of clueless, have you read the latest editorial in the Tribune? My dear friend and colleague Mick Dumke is always telling me to stop reading Tribune editorials. But this one is just too weird to resist, especially in the aftermath of Orr's TIF report.

While urging Mayor Emanuel to keep Inspector General Joe Ferguson, the Trib writes, "We like much that the mayor has done to extract city government from his predecessor's fiscal abuse and departmental neglect."

C'mon, Tribune people—you can say the predecessor's name. You must know it. After all, you endorsed him six times, fiscal abuse and all.

"Mr. Mayor, you know better than this," the editorial concludes. "You are the manager your predecessor only pretended to be. You demand accountability in others."

I was hoping that by the end of the editorial, the Tribune would remember the previous mayor's name. But no such luck.

Which brings me back to Clerk Orr's report on the $457-million-a-year property tax scam that apparently doesn't fall under the Tribune's definition of "fiscal abuse."

As part of his report, the clerk does something the mayor—like his predecessor—doesn't do. He ranks the TIF districts in order, so we know which ones get the most money.

As has always been the case, the richest TIFs are located in the richest communities. In this case, the Near South TIF district is this year's big winner, bringing in about $65 million.

It covers that poor and blighted community just south of the Loop where lots of prosperous professionals live. Mayor Emanuel's predecessor set up the TIF district to help subsidize a housing complex that he eventually moved into. Sweet move, Mayor Predecessor!

The Near South TIF district is just north of the area where Mayor Emanuel intends to build the DePaul basketball arena. So it's a pretty good bet that before that boondoggle is over, additional funds will be transferred—"ported," in official lingo—from the Near South TIF.

A word or two about the basketball arena plan, which also includes a new hotel. Mayor Emanuel intends to spend the $55 million to buy land that's currently taxable. But as soon as the mayor buys the land, it will be publicly owned and therefore tax exempt.

Which sort of defeats the whole purpose of the TIF program: to invest property tax dollars on development deals today so that we'll have more property tax revenues for tomorrow. Presumably to spend on things we want, like schools and police.

In this case, though, Mayor Emanuel wants to spend $55 million on a deal that will produce no property tax dollars tomorrow. And we'll have to raise everyone's taxes to pay for the schools and police we want—or make more cuts.

So we're spending money to lose money—a concept so outrageous that even Mayor Predecessor didn't attempt it. At least not on this scale.

You know, there are so many sexy things in the county clerk's report that I'm starting to think J.K. Rowling anonymously wrote it.

But it keeps getting better. After the Near South TIF, the richest TIF district was LaSalle Central, which represents the notoriously blighted community known as the city's financial district—you know, where hedge fund operators and other mayoral friends tend to have their offices.

You'd think that a mayor dedicated to eradicating fiscal abuses would take a close look at an antipoverty program in a silk-stocking district. Apparently Mayor Emanuel was too busy eradicating schools in low-income black communities.

Anyway, LaSalle Central brought in $20 million. That means that Mayor Emanuel will be in a position to hand out more corporate welfare like the gravy his predecessor ladled out to United Airlines (about $26 million), MillerCoors ($6 million), Accretive Health Care ($6 million), and NAVTEQ ($5 million), among others.

And you wonder why Mayor Emanuel—like his predecessor—gets so many campaign donations from corporate America.

In third place was the Canal Congress TIF, which brought in $19.6 million. That's located in another incredibly blighted community just south of the LaSalle Central TIF district. Who knew the financial district was in such need of a lift?

At the bottom of Clerk Orr's list are the truly poor and blighted communities like Englewood, Austin, and Roseland, which together will receive roughly $10 million from the TIF honeypot.

The rich get richer and the poor have to leave town. Just call it economic development—Mayor Emanuel style. Unless you want to keep blaming it on some guy named Daley.

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