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Mayor Daley didn’t just depart the City Council Wednesday with hugs, kisses, and another attempt to shape his legacy. He also ccommitted the city to hand out more than $17 million in subsidies from his favorite fountain of taxpayer funds, the tax increment financing program.
And there’s more to come. Daley got the council to sign off on the creation of a new TIF district covering swaths of a couple neighborhoods on the south side, and other more expensive projects are in the pipeline.
"I believe Chicago is better off today than it was on my first council meeting," Daley said yesterday.
But the TIF pledges come as the mayor is leaving the city's piggy banks empty. The city is facing a budget hole estimated at more than $500 million this year, and aides to mayor-elect Rahm Emanuel are already expecting he'll have to draw on some TIF funds to help patch it. In addition, about half of what's collected by the TIF program would otherwise go to the Chicago Public Schools, which is facing its own deficit in excess of $700 million.
As you’ve undoubtedly heard by now, the TIF program is the city’s chief economic development mechanism. It siphons off about $500 million a year in property taxes, yet little of the money ends up in the city’s most depressed areas.
Mayor-elect Rahm Emanuel has pledged to reform the TIF program, starting with creating standards and sharing information that will let taxpayers know how their money is being spent.
“There will be things like establishing for the TIFs not only the level of transparency I think they need but a board to evaluate what is the economic activity we want out of this, out of TIFs, what is the job creation,” he said in a recent interview with the Trib. “After 20-plus years of TIFs we still do not have as a city what is the standard to judge future TIFs by."
But Emanuel isn’t the mayor yet.
At his City Council press conference Wednesday, Daley boasted about a flurry of new TIF expenditures:
• $2.5 million for the Small Business Improvement Fund, or SBIF, an initiative that provides grants of up to $150,000 to help neighborhood business owners spruce up their properties.
• $2.5 million for the Neighborhood Improvement Fund, or NIP, which gives grants of up to $22,500 to help people fix up their homes.
• $2.9 million to help a developer turn a former Goldblatt’s store at 47th and Ashland into housing for low-income seniors.
• $6 million in subsidies for a South Loop office expansion by Accretive Health, a company that helps health care organizations increase revenues.
• $3 million for improvements to Livingston Field, a near west side park built on land the city acquired through a deal with the Illinois Medical District, which previously received tens of millions of dollars in TIF subsidies.
• $750,000 for a new sports field in the Hermosa neighborhood.
• A yet-to-be-determined amount of money was also committed to rehab vacant properties if some of the units are set aside for affordable housing—a compromise deal forged with advocates who’d been fighting for months for a city commitment to spend TIF funds on affordable housing.
• The council also agreed to create the new 67th/Wentworth TIF district in Englewood and Grand Crossing, primarily to aid the redevelopment of the site once occupied by Kennedy-King College. Some TIF money was used earlier to move the school to 63rd and Ashland and redevelop the area around it, but little economic development has resulted.
It must be said that all of these initiatives involve relative chump change. As my colleague Ben Joravsky wrote last week, earlier this month the Community Development Commission, one of scores of city panels made up of Daley appointees, recommended spending about $130 million on several larger-scale projects.
It must also be said that some of Daley's newest commitments are undoubtedly worthy—for example, Chicago has an affordable housing shortage that needs greater attention.
But the TIF program was supposed to create jobs and drive up the tax base, which in turn should increase more tax revenues that can be used to spur more development. Parks and nonprofit housing facilities don’t do that. On the other hand, is that too fine a point? Do people care as long as the money’s being used for something they consider helpful and good?
And what sort of returns are taxpayers getting on their investments—enough to justify spending more in these economic times?
Here's the thing: It’s never really been debated openly. Yesterday was no different.