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Shedding Light on the Shadow Budget

The TIF budget we recently pried from the city's grip reveals drastic inequities in how the money's spent.

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Last Thursday, with wounds still raw from a contentious budget vote the day before, Mayor Daley used the ribbon-cutting ceremony for an upscale indoor market in the West Loop to rebuke rogue aldermen and other critics of his tax increment financing program.

The Chicago French Market, in the Ogilvie Transportation Center, is what the TIF program is all about, the mayor said. If the city hadn't kicked in $8 million in taxpayer-funded subsidies, the market wouldn't have been built and an economic opportunity would have been missed. "The city had to put some skin in the game and that's what it did," Daley said.

The mayor was right—the market is an excellent example of what the TIF program is all about. But it's not a good example of what it's supposed to be about.

Daley has claimed for years that the program is the city's chief tool for bringing economic development and infrastructure investment to neighborhoods that couldn't otherwise attract them. "Most of [the TIF money] is pledged for economic development in depressed areas, to bring jobs back or keep jobs there," the mayor said on WBEZ last month.

In the case of the market, the City Council, at Daley's urging, voted in 2006 to spend a total of $12 million in taxpayer money on construction of a new shopping area in the Ogilvie Transportation Center; $8 million of that sum went to the French Market. The project happens to be headed by a well-to-do, politically connected developer who's contributed thousands of dollars to the mayor's campaign coffers. And the city plans to spend another $23 million in the River West TIF district through 2011.

By contrast Roseland, one of the poorest neighborhoods in town, will get just $5 million to spend through 2011.

That's typical of how the TIF program works citywide, according to the Daley administration's own budget for the program—a document that the Reader obtained through a series of Freedom of Information Act requests and posted at last Friday. This is the document we've been referring to as the "shadow budget" because the city puts it together behind closed doors and had previously refused to release it publicly, even though it maps out the use of about half a billion dollars a year in taxpayer money.

An analysis of the budget, which lays out proposed and approved expenditures for 152 active TIF districts from 2009 through 2011, shows that the program has generated a huge kitty that primarily funds improvement projects in thriving neighborhoods.

Chicago TIF districts
  • Though most TIF districts are on the south and west sides, those in the city center
    generate—and therefore get to spend—most of the money.

Eight of the ten districts set to receive the most TIF-funded investment through 2011 are in prosperous neighborhoods near downtown, such as the South Loop and West Loop, while the districts that will receive the least investment are concentrated on the south and west sides. The biggest winner is the Near South TIF, roughly bounded by Michigan, Van Buren, State, and 21st Street: the TIF budget indicates that about $118 million will be spent there through 2011 on things like streetscaping on Congress, facade work on the Harold Washington Library, a rehab of the Blackstone Hotel, and construction of a new Jones High School. That's more than the total TIF spending planned for 82 districts on the other end of the spectrum in the same period.

Moreover, what qualifies as an "economic development" project is so loosely defined that the Daley administration can—and does—justify spending TIF money on just about anything. Among the hundreds of projects slated to receive funding are public housing redevelopments, new sidewalks and speed humps, CTA station reconstruction, ornamental street lighting, and subsidies for corporations, a bakery, a Jewel, and a theater troupe. Most, like public infrastructure and maintenance spending, are not subject to consideration by the City Council even though comparable expenditures in the regular budget are; others, such as the subsidies, benefit for-profit companies operating in already prosperous business districts.


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