Illinois PIRG – Chicago Newstips by Community Media Workshop http://www.newstips.org Chicago Community Stories Mon, 14 Jul 2014 17:31:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.13 Will Emanuel back privatization transparency measure? http://www.newstips.org/2013/04/will-emanuel-back-privatization-transparency-measure/ Tue, 09 Apr 2013 23:09:05 +0000 http://www.newstips.org/?p=7103 Community and public interest groups are calling on Mayor Emanuel to support a privatization transparency ordinance that is expected to be considered by the City Council Rules Committee on Wednesday.

The Privatization Transparency and Accountability Ordinance, submitted last November by Alderman Roderick Sawyer (7th) and sponsored by 32 aldermen, would require a cost-effectiveness study and public hearings when the city seeks to contract out services and operations.

Along with a cost-effectiveness study prior to the award of any contract, Sawyer’s ordinance would require a study of possible alternatives in collaboration with unions representing city workers whose jobs could be threatened.  City workers would also be qualified to bid on contracts through their unions.

Noting concerns over unemployment, wage levels and workforce diversity, the ordinance would require that at least half of contract work be performed by city residents, and that contractors pay wages and benefits comparable to what city workers get for the same work.  It would mandate City Council hearings and approval of contracts over $250,000.

“I have a concern about touting a monetary savings if we haven’t thought about the people that will lose a job, the families that could lose a home and the local businesses that could lose a loyal customer,” Sawyer said when he introduced the ordinance.

“If we gut the foundation of our most stable communities by moving jobs to companies that do not have a residency requirement, does the money saved on the budget make up for the money lost in property tax and sales tax revenue? Is there consideration of possible collateral costs of neighborhood destabilization and loss of property values?”

In a letter to Emanuel, the groups backing Sawyer’s ordinance note the $200-million lawsuit against the city based on a non-compete clause in the parking meter privatization deal signed by Mayor Daley in 2008.  Daley now works for the law firm that negotiated the deal.

The process of privatization “must take place in the open from beginning to end,” the groups write.  “The public should be aware of every step that is taken in pursuing a privatization proposal — from the initial hiring of a consultant to the selection of a winning bidder.”

“Given Mayor Emanuel’s repeated statements that he is committed to transparency and accountability in City government and privatization deals, we think this should be an easy commitment for him to make,” said Hailey Golds of Illinois PIRG, one of the groups backing the ordinance.

Other groups signing the letter include the Chatham Business Council, Horner Park Advisory Council, West Loop Community Organization, Rogers Park Community Organization, Wicker Park Committee, and Wrightwood Neighbors Association.

 

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TIF reform: one year later, no action http://www.newstips.org/2012/08/tif-reform-one-year-later-no-action/ http://www.newstips.org/2012/08/tif-reform-one-year-later-no-action/#comments Wed, 29 Aug 2012 19:41:39 +0000 http://www.newstips.org/?p=6584 A year after Mayor Emanuel unveiled his TIF Reform Task Force’s report with great fanfare, none of its recommendations have been carried out – and the city has a long way to go on transparency and accountability around job requirements for TIF projects, according to a new report.

Along with greater transparency, Emanuel’s task force recommended subjecting all TIF projects to a thorough justification process; establishing strict performance metrics and taking swift action including revoking TIF funding when requirements aren’t met; and creating an internal TIF oversight board.

“None of the task force’s recommendations have gone into effect,” according to a new report from Illinois PIRG.

“The proposed reforms would move us in the right direction,” said Hailey Witt of Illinois PIRG in a release.  “But it’s not enough to have these ideas on paper.”

Short on Sunshine

In addition, the city has yet to fully comply with the TIF Sunshine Ordinance passed in 2009, according to the report.  Of five documents required by the ordinance, none of the projects studied by Illinois PIRG had more than three available online, and most had only one or two.

Of 32,396 jobs promised in $320 million worth of TIF projects, only 16,948 — just 52 percent — could be accounted for, according to Illinois PIRG.

The study looks at 21 TIF projects from the past decade that promised to create more than 200 jobs, in some cases far more.  It found only 17 had clear job creation requirements, and only 14 had enforceable clawback language if job requirements aren’t met.  Six projects had met jobs requirements, six had partially fulfilled requirements, and no information was available for nine.

Little enforcement

In only  two cases – CNA’s $13.6 million subsidy from the Central Loop TIF, and Bank of America’s $27 million subsidy from the River West TIF –did the city require funds to be returned for noncompliance.

For seven projects where requirements were not fulfilled and five where documentation showed they were fulfilled only for certain years, no enforcement action was taken.

“Given that the purpose of TIF is to use taxpayer dollars to create jobs and stimulate economic growth, it’s unacceptable that the city isn’t holding developers accountable for achieving these goals,” Witt said.

Illinois PIRG recommends the city implement the TIF task force’s recommendations, include clear jobs requirements with strong clawback provisions in redevelopment agreements; do much more to monitor and enforce requirements; and do a better job collecting and publishing data.  A TIF website should meet “Transparency 2.0 best practices,” with a comprehensive searchable data base, the group argues.

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Protest to target River Point, LaSalle Central TIF http://www.newstips.org/2012/08/protest-to-target-river-point-lasalle-central-tif/ http://www.newstips.org/2012/08/protest-to-target-river-point-lasalle-central-tif/#comments Mon, 06 Aug 2012 22:52:28 +0000 http://www.newstips.org/?p=6523 The news that the LaSalle Central TIF district took in no new revenue last year adds urgency to the demand of community groups that the TIF be shut down, said Eric Tellez of the Grassroots Collaborative.

On Tuesday, community activists will protest the newest LaSalle Central TIF subsidy, $30 million going to finance a plaza inside the planned River Point office development at Lake and Canal.

Starting at 11 a.m. (Tuesday, August 7), they’ll march from Merchandise Mart to the LaSalle Street district for a press conference and rally, and they’ll leaflet at a business owned by one of River Point’s developers.

They say “giving property tax dollars to wealthy developers to build in prosperous areas is not an effective strategy” for economic development – especially when basic services are being cut in the city’s neighborhoods.

In July, the annual TIF report from County Clerk David Orr revealed that annual TIF revenue in Cook County has declined 18 percent since the housing crash in 2007, and that LaSalle Central was among nine TIF districts with no revenue last year.

If that trend were to continue, the city could be forced to transfer funds from other TIF districts to pay for existing commitments downtown.  LaSalle Central TIF agreements involve multimillion-dollar subsidies to corporations including Miller-Coors, Ziegler Co., Accretive Health Inc., NAVTEQ, and United Airlines, which is collecting a $24 million handout.

Grassroots Collaborative is calling for shutting down the LaSalle Central TIF.  That would mean approving no new subsidies, and once current obligations were met, returning new property tax revenue to the city, schools, and other taxing bodies from which it is being diverted, Tellez said.

Earlier this year, the group successfully pressured CME to return $15 million to the LaSalle Central TIF and sponsored a budget amendment to capture TIF surplus that may have helped persuade Mayor Emanuel to declare a $60 million TIF surplus.

In July, Grassroots Collaborative delivered a letter to Emanuel asking him to withdraw the River Point subsidy and wind down the LaSalle Central TIF.

Emanuel has so far failed to implement the proposals of his TIF reform task force, Tellez said.  (Illinois PIRG recently reported that the city is still failing to track TIF-related job creation promises).  And, he adds, Emanuel has completely ignored his campaign pledge to stop spending TIF money in wealthy areas, Tellez said.

“These deals are not worth it,” he said. “On the one hand we are giving this money to corporations that don’t need it, and then we’re putting Chicago taxpayers on the hook for it” should TIF revenues continue to falter.

They’re hoping their protests will ultimately save taxpayers money by raising the political costs for corporations receiving TIF subsidies.

“We want to discourage corporations that don’t really need this help at all to not be greedy and not go after the money,” Tellez said.

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Questions remain on infrastructure trust http://www.newstips.org/2012/04/questions-remain-on-infrastructure-trust/ http://www.newstips.org/2012/04/questions-remain-on-infrastructure-trust/#comments Sun, 15 Apr 2012 21:53:07 +0000 http://www.newstips.org/?p=6062 Illinois PIRG is calling on aldermen not to approve Mayor Emanuel’s infrastructure investment trust without more public safeguards, and the Grassroots Collaborative is urging a “no” vote on the proposal.

Leaders of community groups and union members in Grassroots Collaborative will hold a press conference Monday, April 16 at 9:30 a.m. on the 2nd floor of City Hall to call on aldermen to vote against the ordinance establishing the trust.

The council’s finance committee holds at hearing on the ordinance at 10 a.m. Monday.

Emanuel’s new tweaks to the ordinance go just partway to addressing the groups’ concerns.  “He’s dealing with the easy stuff,” said Celeste Meiffren of Illinois PIRG.

PIRG has called for far more stringent conflict-of-interest protections than Emanuel has offered: “Members of the board of directors should be free from conflicts of interest and instead should represent Chicagoans as primary stakeholders,” Meiffren writes in a blog post.

She calls for requiring board members to divest from any holdings in companies doing business with the city and in banks investing in the trust, and to agree not to work for them for a period after serving on the board.

As it stands the board looks to be comprised of CEOs and CFOs who will be “controlling taxpayer assets” and “accountable to nobody,” Meiffren said.

She doesn’t think putting an alderman on the board “solves the problem.”  She’d like to see watchdog groups represented on a board structured so that business leaders had a purely advisory role.

More bad backroom deals

Beyond that are larger concerns about the purpose of the trust.  “The ordinance is so vague that worst-case scenarios are really possible,” said Meiffren.

PIRG says the trust should be specifically committed to getting the best deal for the city and taxpayers rather than investors; and each deal should be subject to an independent evaluation to make sure that happens.

“There’s nothing in the ordinance that would prevent another bad backroom deal from happening,” Meiffren said.  “We have a history of bad deals, so we need to go above and beyond to ensure that taxpayers aren’t ripped off again.”

She cites the one project Emanuel has specified for the trust: a $225 million effort to retrofit city buildings for energy efficiency.  “Why can’t we do that with municipal bonds, which will get us a much better interest rate?” she asks.

“Instead of just going to private investors every time, we need a mechanism for determining what the best deal is – that evaluates every deal against other options,” she said.  “Nothing here does that.”

While the city does have a large debt load, its bond rating remains strong, and it continues to issue bonds:  last October Chicago issued over $400 million in general obligation bonds and $330 million in sales tax revenue bonds.

Who will pay?

Grassroots Collaborative is concerned that low- and middle-income communities will be shortchanged by the trust, said Eric Tellez.

“We’ve seen the TIF program focus resources downtown,” he said.  “With (infrastructure trust) investors’ goal to make money,” they could also concentrate on downtown and wealthy areas, he said.

And user fees to pay back private investors could hurt moderate-income residents.  “It injects a profit-making factor into public assets,” Tellez said.

“It could open the gate to [creating] revenue-generating streams for public services,” he said. “Will we have to pay to go to the park?  Will higher fares prevent people from getting to work?”

Such concerns are fed because “we haven’t been given any details,” he said.  “The actual proposal doesn’t have a lot of clarity.”

The trust could also “create a union-busting environment” if there’s pressure to cut labor costs in order to pay back investors, he said.

The Illinois Coalition to Protect the Public Commons has also come out against the deal. “It is too big, too vague, too secretive and too unaccountable,” said Lora Chamberlain of Illinois Citizens for Public Banking, a coalition member.

“We don’t put money into a farebox to make some guy rich,” said Charles Paidock of Citizens Taking Action, a group of public transit-dependent residents.

As the Emanuel administration stretches for the most creative and innovative solutions to the city’s financial situation, it’s worth noting that these often entail higher risk.  One innovative approach in recent years was the variable-rate bond issued by many municipal entities.  The costs of these deals have been much higher than anticipated.

Chamberlain cautions that the trust should offer investors revenue sharing rather than dedicated revenue streams, an approach that has gotten some European countries into deep trouble.

Her group offers a much more conservative approach: a public infrastructure bank.  It would leverage a portion of the city’s TIF surplus to fund infrastructure projects, but the rate of return would be kept relatively low and the city would retain control over public assets.

Their model is the Bank of North Dakota, the nation’s only state-owned bank, created during a populist upsurge in 1919.  BND holds the state’s deposits, lends to small banks in the state, and sends half its profits back to state coffers. It’s part of the reason North Dakota has no deficit.

On the other hand, there’s lots of money out there looking for public investments right now – especially as big financial firms back off trading under pressure from new regulations.

They’re looking for the safety of public investments and hoping for something approaching the high profit rates they got used to during the boom, said Tellez.  “They want to have their cake and eat it too,” he said.

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Super PACs: Bad for democracy, good for TV stations http://www.newstips.org/2012/02/super-pacs-bad-for-democracy-good-for-tv-stations/ http://www.newstips.org/2012/02/super-pacs-bad-for-democracy-good-for-tv-stations/#comments Wed, 08 Feb 2012 22:38:59 +0000 http://www.newstips.org/?p=5639 Super PACS “represent much of what is wrong with American democracy rolled neatly into one package,” said Marites Velasquez of Illinois PIRG, announcing a new report showing that fundraising monsters suddenly dominating our elections are funded by a very small number of very rich people.

Of itemized contributions by individuals to Super PACs in 2010 and 2011, 93 percent came from 726 individuals giving $10,000 or more, and more than half came from just 37 people who gave over a half-million dollars each, according to a new report from Illinois PIRG Education Fund and Demos.

Super PACs are “tools for powerful special interests” that work by “drowning out the voices of ordinary Americans in a sea of sometimes-secret cash,” Velasquez said.

“They undermine core principles of political equality in favor of a bully-based system where the strength of a citizen’s voice depends upon the size of her wallet,” said Adam Lioz of Demos.

Noting that 17 percent of Super PAC money came from businesses, the groups recommend the Illinois General Assembly pass legislation requiring shareholder approval for corporate political spending, among other reforms.

A bonanza for broadcasters

At the Nation, John Nichols and Robert McChesney (co-founders of the media reform group Free Press) detail the cost to democracy — and the bonanza for TV stations.

TV stations will take in up to $5 billion from political advertising this year – nearly twice the $2.8 billion they got four years ago.  The amount being spent on TV ads for House races is up 54 percent since 2008; for Senate races it’s up 75 percent.

Political ads accounted for 1.2 percent of total ad revenue in 1996; this year it’s likely to be 20 percent, and more in key states.

Super PACs specialize in scorched-earth, no-holds-barred negative advertising which actually aims at depressing turnout, and succeeds: research shows “the main consequence of negative ads is that they demobilize citizens and turn them away from electoral politics.”

And, of course, the prospects of a candidacy that doesn’t represent the interests of big-money donors becomes increasingly remote.

Meanwhile, with news staffs cut and much less time devoted to political coverage, TV news increasingly focuses on horse-race and cat-fight aspects.  “Such coverage is cheap and easy to do, and lends itself to gossip and endless chatter, even as it sometimes provides the illusion that serious affairs of state are under scrutiny,” write Nichols and McChesney.  But it is “as nutrition-free as a fast-food hamburger.”

Naturally, the National Association of Broadcasters fights any campaign finance reform that would cut into station revenues, most recently opposing legislation requiring Super PACs to fully disclose their donors.

NAB has also opposed what might be the simplest reform: requiring TV stations to provide free airtime to candidates as a public-service requirement.

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On TIF reform, a long way to go http://www.newstips.org/2012/01/on-tif-a-long-way-to-go/ http://www.newstips.org/2012/01/on-tif-a-long-way-to-go/#comments Tue, 31 Jan 2012 23:30:35 +0000 http://www.newstips.org/?p=5594 TIF subsidies returned by three corporations should be declared surplus and used to restore cuts in public services; and Mayor Emanuel should hold off on new TIF spending until he can implement his TIF reform panel’s recommendations, groups working on the issue said Tuesday.

News broke Monday that CME, CNA and Bank of America were returning a combined $33 million, CME saying it didn’t need the money now that the state has cut its taxes, CNA and Bank of America admitting they hadn’t met job creation goals.

CME had been the target of a series of protests by Grassroots Collaborative, which on different occasions set up a classroom outside the corporate headquarters to dramatize lost school funding, declared the site a “corporate crime scene,” and held a bake sale for the corporation.  Last week Stand Up Chicago delivered a golden toilet to CME, which was to get $15 million for a luxury bathroom, cafe, and fitness center.

Restore public services

“With communities reeling from proposed school closings, cuts to libraries, and the shutdown of six mental health clinics, the $33 million dollars should be immediately returned to critical public services that working families of Chicago depend on, and not redirected back to downtown TIF slush funds,” said Amisha Patel.

She said the news reflects the impact of groups working to highlight the issue of corporate subsidies and tax breaks.

Also Monday, Emanuel announced he would create an online TIF database and order random independent audits of TIFs.  It was his first action on the recomendations of his TIF reform panel since its report last August.

Illinois PIRG released a report calling on Emanuel to fully implement the panel’s recommendations as a first step toward TIF reform, and to declare a moratorium on new TIF spending until the reforms are in place.

“If the Mayor and the City Council admit that TIF is broken, why would they continue to use the program before it gets fixed?” said Celeste Meiffren, author of the report.

Subsidies keep coming

Since the panel’s report, the City Council has approved $26 million in TIF spending, and the city has submitted proposals for another $17 million in TIF projects, she said.

Many more corporations could be falling short of job-creation promises attached to TIF subsidies they’ve received.  Meiffrin pointed out that the city has yet to fully implement the TIF Sunshine Ordinance passed in 2009 – and one item missing from every TIF report is the annual employment certificate that recipients are required to file.

She also called for a law requiring companies that fail to meet job-creation agreements to return TIF subsidies.  “Right now there’s no guarantee that if companies don’t deliver, taxpayers will get the money back,” she said.

Her report emphasizes the importance of including TIF spending in the city budget and calls for measures beyond the reform panel’s recommendations, including limiting TIF use to areas that need economic development; limiting TIF diversions to property value growth apart from inflation; closing TIF districts that have met their redevelopment goals; and returning unused TIF accumulations to the general property tax pool.

Emanuel’s reform panel “didn’t get at the real issue,” which is the diversion of resources from public services and community development to corporate subsidies, Patel said.

She called on Emanuel to “ensure that this money not only immediately goes to keep our schools, libraries, and clinics open, but that downtown TIF districts like LaSalle Central no longer continue to funnel hard-earned tax dollars to Chicago’s corporate elite.”

Protests continue at CME

On Friday, February 3, CME will again be the target of protests, as Chicago Jobs With Justice rallies at the State of Illinois building at noon and marches to the Chicago Board of Trade, demanding a financial transaction tax as a way of putting teachers back to work.

They say a $1 tax on each contract at the Chicago Mercantile Exchange and Board of Trade – a negligible charge, since contracts average $200,000 in value – would raise $6 billion a year for the state.

And Stand Up Chicago is continuing pressure on CME over its huge state tax break, calling on the corporation to “continue to reevaluate its desire for taxpayer subsidies” and “return the millions in public money it has taken over the years back to our communities.”

“Returning TIF money is a good start, but CME still has a long way to go before it can truly give up its crown as Chicago’s king of corporate welfare,” said Elizabeth Parisian.

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Traffic camera concerns http://www.newstips.org/2011/10/traffic-camera-concerns/ Thu, 27 Oct 2011 20:19:37 +0000 http://www.newstips.org/?p=4869 Chicago now has one of the best red light camera deals in the country – and should be careful to maintain that distinction as it adds speed detectors to cameras around schools and parks, according to a new report from Illinois PIRG.

Chicago’s $84 million deal with Redflex Traffic Systems is the largest automated traffic enforcement contract in the nation, and it stands out because Chicago pays Redflex for the equipment, but the city’s transportation department operates the system, Celeste Mieffren of Illinois PIRG said.

That eliminates some of the worst features of the privatized traffic enforcement industry found in the report, particularly incentives like ticket quotas and disincentives for safety improvements that “put profits over public safety.”

“The good news is that Illinois and the City of Chicago have done a decent job of implementing protections for the public in these contracts,” said Meiffren. “But with this new bill to expand the scope of automated traffic enforcement in Chicago, we want to make sure that they don’t fall into the same traps that we’ve seen in other places across the country.”

Chicago plans to add speed detectors to red light cameras near schools and parks under legislation now making its way through Springfield.

The automated traffic enforcement industry has “significant political clout,” deploying lobbyists and campaign contributions to shape traffic enforcement policy – and sometimes traffic safety policy – in ways that boost their bottom line, according to the report.

One example:  some Redflex contracts penalize cities that alter yellow light timing – though adding a second or two to the length of a yellow light can reduce stoplight violations and accidents dramatically.

With 2,000 camera systems nationally, accounting for 40 percent of the market, Redflex is the largest supplier of automated traffic enforcement systems in the nation.

Many cities are turning to automated traffic enforcement under pressure from budget deficits, according to the report.  In general, it’s part of a larger trend of outsourcing management of public services.

Local governments should put public safety over profits in these contracts, and should make sure contracts protect from conflicts of interest, avoid incentives based on volume of tickets or fines, and retain control over traffic policy and engineering decisions, according to the report.

The group urges cities to heed Federal Highway Authority recommendations and consider traffic engineering solutions for problem roadways before turning to enforcement.

The Active Transportation Alliance, which supports the speed enforcement cameras, is doing that kind of work.  With its Better Blocks and Safe Routes to School programs, the group helps communities plan for improving traffic safety to encourage more walking and biking, said Ethan Spotts.

Planning experts from ATA meet with community members in libraries, schools, and block parties, tour areas and get input, and help develop recommendations for improvements to calm traffic, which can include curb bulb-outs, stop signs, or improved lighting and intersection marking.  Many improvements are funded by aldermanic menu money, Spotts said

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TIF reform? Not yet. http://www.newstips.org/2011/09/tif-reform-not-yet/ http://www.newstips.org/2011/09/tif-reform-not-yet/#comments Thu, 01 Sep 2011 22:50:07 +0000 http://www.newstips.org/?p=4718 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.

Corporate welfare

“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.

Affordable housing

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.

Implementation matters

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.

Related:

On TIF reform, Bronzeville has some ideas

 

Time for TIF reform?

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