TIF Reform Panel – 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=4.4.11 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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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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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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