THE LOOP — City tax revenues set aside for economic development that some have called a mayoral "slush fund" declined 7.65 percent this year, but still topped $422 million, according to figures released Wednesday by Cook County Clerk David Orr.
Orr's annual report on Tax Increment Finance district funds is an attempt, he said, to bring transparency to what some have called a "shadow budget." It found the city took in $35 million less than last year, thanks to three development districts being retired and widespread declines in property values.
"I believe TIFs are a valuable economic tool if used properly," Orr said in a news conference at his offices in the Dunne Building Downtown. But he quickly added, "It's a tool that could be used more successfully than it is."
TIF districts cap tax revenue in a designated area, and from that point on any increases in property-tax revenue are set aside, with that money specifically designated for capital projects that spur economic development. But critics, including Orr, complain that it's done completely apart from the city budget, with minimal explanation of how the funds are spent. He said almost $6 billion had been diverted from city coffers since 1986.
"It's been a way to create a $6 billion fund that most people don't understand," Orr said. "Clearly there's still a lot of work to be done to make it easier to follow the TIF-money trail."
The three TIFs that were retired last year included the Near West district, which brought in an average of $13.5 million a year for the last five years.
The largest TIF districts by revenue were the Near South at $65.2 million, Canal/Congress at $19.9 million, Chicago/Kingsbury at $19 million and Kinzie Conservation at $18.6 million.
No new TIF districts were created in the city, but Orr drew particular attention to the 105th/Vincennes district, which grew exponentially from 192 properties to 4,575.
"I'm not commenting on the worthiness of this TIF," Orr said, but added that city sources gave little, if any, reason for the expansion.
Orr also trumpeted a new TIF Viewer that allows residents to see TIF districts, and properties within those districts, also broken down by ward. He recently added TIF collections to property-tax bills and has posted an "Understandings TIFs" video online. About 20 percent of city properties are in a TIF district.
TIF districts multiplied under Mayor Richard M. Daley, from 50 in 1999 to more than 150. Under Mayor Rahm Emanuel, TIF money has gone to the proposed DePaul arena near McCormick Place, the addition to Payton College Prep and the proposed new Barack Obama College Prep. Critics have suggested the money should be reapportioned to conventional funds, especially considering budget cuts at Chicago Public Schools.
"These should not be funds, particularly billions of dollars, used at the whim of a particular mayor," Orr said.
Emanuel ran on a platform of bringing reform to TIFs, but they have declined only slightly since he took office. Orr did say that the $422 million was the lowest figure for city TIF revenue since 2005. Ald. Bob Fioretti (2nd) has repeated calls for reform, calling TIFs a "slush fund" and a "shadow budget." Other aldermen have pushed for an online city database on TIF activity.
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