Sep 1, 2011
With the release of his TIF Reform Panel report, Mayor Emanuel may want to check “TIF reform” off his to-do list, but community activists who work on the issue say that would be highly premature.
“They’re talking about transparency as if that’s all we have to do,” said Sonia Kwon of the Raise Your Hand Coalition. “Transparency and accountability are just tools to reform TIF. I don’t see this as TIF reform.”
In any case, Emanuel’s panel skips “the first step in transparency” – listing TIF information on property tax bills, said Kwon. “To know you are in a TIF district and how much of your tax money is going to TIF – that’s the first step.”
That was a major proposal of the Community TIF Task Force of the Neighborhood Capital Budget Group, which brought together dozens of community groups, said Jacqueline Leavy, former executive director of NCBG. (It was also a major proposal of then-Cook County Commissioner Mike Quigley, apparently forgotten when he reacted enthusiastically to the report this week.)
Fundamental reforms missing
Other fundamental reforms advocated by the community task force — and entirely missing from the Emanuel panel’s report — include limiting the use of TIF to truly blighted communities (which was a campaign promise of Emanuel’s), and providing for extensive community input in planning and monitoring TIFs.
The panel recommends making “but for” criteria explicit – to meet the legislative standard that a project would not be possible “but for” TIF support – but includes a “huge loophole” that would allow subsidies for corporations with downtown offices to continue, said Amisha Patel of the Grassroots Collaborative.
It actually ends up expanding the criteria, said Bob Palmer of Housing Action Illinois.
Grassroots Collaborative has called for shutting down the LaSalle Street Central TIF district, and has recently held demonstrations targeting corporate recipients of TIF largesse – including United Airlines, which has received over $30 million in TIF subsidies (and $20 million in additional city subsidies) while routing fuel purchases through a small satellite office in order to evade the city’s sales tax.
“It makes no sense to take $30 million from schools and give it to a corporation that’s taking in billions in profits,” said Patel. “It has no real impact on [United's] bottom line – but it has a huge impact on schools.”
“We really need to tighten up the definition of blight,” said Kwon – and not just downtown. She gives her own ward as an example: the 47th, where the mayor also lives. “The neighborhood is doing really well, homes are selling, it’s not impacted by the real estate downturn” – yet there are six TIFs.
Raise Your Hand has organized against overuse of TIF at the expense of public schools and has raised concerns about hoarding of uncommitted funds in TIF reserves – currently amounting to $847 million – while the city and schools face severe budget crises.
Ultimately there’s nothing to stop TIF from continuing to operate as a mayoral slush fund, said Patel. “If the mayor decides [a proposal] is something he wants, he’s going to give them the money,” she said.
Nothing for communities
The panel’s recommendations “are not going to impact communities,” said Valerie Leonard of the Lawndale Alliance, which has held annual TIF town halls on the West Side (and recently launched Follow The Money, a blog on North Lawndale TIFs). There’s absolutely nothing about community input in planning and monitoring TIFs; nothing about community advisory councils for TIF districts, she said.
“There’s been no community engagement at the outset” of establishing TIFs, said Leavy – redevelopment plans are “all boilerplate” by consultants who conduct “windshield surveys” of communities. “It’s so top-down, so downtown-driven, so far from the specific needs and opportunities of particular communities.” Nothing in the panel’s recommendations would change that.
“There’s no mention of making sure that people in communities are actually hired” for new jobs, or ensuring that job training helps people who lack skills to find employment, Leonard said. “I get the feeling the administration feels that would be too hard.”
“The prime determinant should be providing living-wage, family-sustaining jobs,” said Leavy. And there should be strong clawback provisions in every project agreement, she said. The panel’s report is evasive on that subject.
Leavy warns that a number of “creative financing” concepts in the report – bundling TIFs, loan pools, taking equity positions, a TIF venture fund, and stepped-up porting of TIF funds to other districts – merit close scrutiny.
Julie Dworkin of the Sweet Home Chicago Coalition welcomes the inclusion of affordable housing as one of the “metrics” for evaluating TIF projects, but warns that the current definition of “affordable” – based on area median income, which encompasses income levels in wealthy suburbs – is not affordable in many communities.
Sweet Home Chicago has called for dedicating TIF funds to rehab foreclosed homes, and Dworkin said the mayor’s panel “got it wrong” when it said restrictions on TIF financing for new construction in state law present “a key barrier to more activity in this area.”
In fact, state law provides for TIF financing of new construction of affordable housing, which would be required in communities heavily impacted by foreclosures, she said.
Much will depend on implementation, as demonstrated by Illinois PIRG‘s new report on the city’s TIF Sunshine Ordinance, which mandated online posting of TIF documents. The report finds that many documents are missing.
The most significant, said Celeste Meiffren, author of the report, were employment certifications required annually from TIF recipients. None have been posted, she said, so it’s impossible to check on job creation commitments.
Real TIF reform – beyond what the Emanuel administration implements voluntarily – may well require legislative action in Springfield, and interest in reform is growing there, said Housing Action’s Palmer. A TIF reform bill stalled in the spring session; further efforts are expected, he said.
Housing Action has developed a list of TIF reform principles that includes listing TIF information on tax bills; strengthening the definition of “blight”; limiting the land area or proportion to tax base subject to TIF within a municipality; requiring explicit statements of purpose and establishing processes for capturing surpluses and phasing out TIFs; allowing individual taxing bodies to opt out of TIFs, and limiting tax increment captured by TIFs to growth after inflation; establishing transparency in porting TIF funds; and expanding TIF use for affordable housing.