The South Terminal at the CTA’s 95th/Dan Ryan Red Line stop. Credit: Chicago Transit Authority licensed under CC BY-NC-ND 2.0
As the years roll by, mayors and aldermen come and go but the great Tax Increment Financing scam stays forever.
Oh, TIFs, TIFs, TIFs. Haven’t written about them in awhile. But they’re always on my mind, to paraphrase the great Willie Nelson.
They’re particularly on my mind as I follow the falsehoods advanced by both sides in regards to the proposed Red Line TIF district, which would help pay for extending the Red Line south from 95th to 130th.
For what it’s worth, I support extending the Red Line—the city should have done it decades ago. Might have helped fortify the south side and stave off the disinvestment of the last 30 or so years. Guess we’ll never know.
Anyway, back to the untruths in the debate over the TIF district. Let’s start with this nugget from a CTA spokeswoman, who told the Sun-Times, “One’s property taxes will not change because their property is in a Transit TIF [because it] is not an additional tax levy.”
I realize the CTA is trying to neutralize opposition, but this statement is flat out wrong. Property taxes will most definitely change because of that TIF. They’ll go up. And that’s because TIFs raise your property taxes. As soon as a TIF district is created, your property taxes go up.
TIFs are essentially a surcharge the mayor and aldermen slap on your property tax—only they don’t tell you they’re slapping it on your property tax. ’Cause they don’t want you to know you’re paying it. Otherwise, you might stir from your slumber and object.
They just let you pay it. And you do pay it. Even renters, who may never even see a property tax bill. Their landlords generally pass on the tax hikes in the form of higher rents.
Most importantly—it’s not just property owners in a specific TIF district who pay the increase. Every Chicago property owner pays more in taxes when a TIF district is created, even if they live outside the district being created.
So, yes, constituents of Alderpeople Pat Dowell and Brian Hopkins—who’ve been bellyaching the most about the Red Line extension—will pay more in taxes to extend the Red Line. But so will constituents in Beverly and Rogers Park and Austin and Little Village and so on and so forth.
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A TIF limits the amount of property in a TIF district that the taxing bodies—the park district, CPS, the city, the county, etc.—can tax.
As a result, tax rates rise citywide to compensate for the tax dollars the schools, city, parks, etc. aren’t getting from property in TIF districts.
How much more in property taxes have we paid for the dozens of TIF districts our mayors and aldermen have created over the years? I don’t know—the city keeps that information a secret.
Now, it is true that the south side transit TIF is not an “additional tax levy,” as the CTA spokeswoman puts it. But so what? That statement is classic misdirection, intended to confuse you. There are more than one ways to hike your property taxes. The government can budget to spend more money—i.e., raise the tax levy. Or they can increase the tax rate.
And, again, that’s what TIFs do: they raise the property tax rate throughout the city.
Now let’s deal with the untruth offered by Alderpeople Dowell, Hopkins, and Anthony Beale, who are making a major deal out of the fact that “the money for this project will be generated between Madison and Pershing . . . and it will all be spent at 130th. That wouldn’t have been allowed previously,” as Hopkins told the Sun-Times.
Their outrage over TIF dollars being spent outside a specific TIF district is laughable given that it happens all the time. It’s called porting. Dowell, of all people, should know about porting. TIF money intended to be spent building Wintrust Arena in her near south side ward wound up being spent at Navy Pier.
Many schools all over the city and Millennium Park were built with property tax dollars ported in from adjacent TIF districts. Mayor Daley was planning to pay for his Olympics with TIF money ported in from all over town. Funny, I never heard Dowell or Beale or Hopkins (formerly an aide to Cook County Commissioner John Daley, Mayor Daley’s brother) complain about that.
Because TIFs are citywide tax hikes, Chicagoans routinely pay for TIF-funded projects that are nowhere near where they live.
So, no, the property tax used to fund the Red Line extension will not be “generated between Madison and Pershing,” as Hopkins claims.
Instead, it would be generated throughout the city. Because—one more time—TIFs raise everyone’s property taxes.
I hate to say it, but the lament about people in the loop paying for the Red Line sounds like Ronald Reagan talking about welfare recipients using food stamps to buy booze. It’s a way to inflame the middle class into thinking they’re carrying the burden for the poor.
When, in fact, it’s the other way around with Chicago’s TIF program—it generally favors rich neighborhoods over poor ones. As I’ve written many times.
Thus, residents from Beale’s Roseland-based ward pay more in property taxes to fund the Lincoln Yards project in Hopkins’s ward.
Maybe it’s time taxpayers in gentrifying neighborhoods return the favor, so to speak. And spend a little extra property tax dollars to help Roseland, which needs the investment a lot more than Lincoln Yards. That’s for sure.
The real question is—are residents willing to raise their property taxes to promote development by extending the Red Line?
That question probably won’t be asked. Just as residents weren’t asked whether they wanted to raise their property taxes to help pay for Lincoln Yards.
Instead, the city and the CTA will pretend TIFs don’t raise your property taxes. They’ve gotten away with this hocus-pocus for over 30 years—no need for them to stop it now.
Delmarie Cobb–Changing Tides
“School Aid” and Henry Davis, Jr.
David Faris–President Godfather
The city finally posts some (mis)information about its tax increment financing program online.
The unfairness in Chicago’s TIF program continues.
The city’s TIFs will generate a record $561 million this tax year. Which means more money for the mayor to sneakily divert into vanity projects like Navy Pier.