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TIF Surplus Met With Questions from Aldermen

TIF Districts involve real money. Image by jollyUK via Flickr

Carole Brown, chair of Chicago’s TIF Reform Task Force, said Monday that the city has approximately $100 million in surplus TIF money, which should be returned to the general fund.

Brown said 20 to 30 percent of the city’s TIF funds, which total about $550 million, were surplus.

Brown was appointed in May by Mayor Rahm Emanuel to establish a system to review the effectiveness of the TIFs for the 2012 budget.

TIF stands for Tax Increment Financing. A TIF district is  a tax district in which local property taxes are used to fund and develop projects within the borders of that specific district. TIFs can be used for landscaping, park improvements, sidewalks, street and bridge repairs, school renovation and other city improvements.

TIFs have drawn controversy because 50 percent of Chicago’s TIFs are being used for private developments, which include condo buildings and strip malls.

Critics also believe that TIFs are being used to improve areas that are already wealthy instead of using them for impoverished areas that would benefit from the TIFs.

The Chicago News Cooperative reported that several aldermen are seeking to route TIF funds to schools, which Emanuel  has dismissed, saying he prefers a long-term solution and not a one-time fix for the school’s deficit.

Aldermen in the Budget and Government Operations Committee also believe they should have some input and the ability to approve what TIFs will be used for.

Ald. Ray Suarez, 31st Ward, questioned why the surplus of TIF money should be returned to the city’s general fund rather than returning it to property taxpayers in the area of a TIF. Suarez said it would be better to give back to the people who paid it.

Ald. Walter Burnett, 27th Ward, asked about the misuse of TIFs that do not show up on the budget, such as the supplementation of salaries, according to reports by The Chicago News Cooperative. Burnett also questioned the use of TIF funds to pay the salaries of city staff members.

Other aldermen asked about job creation and transferring money from one TIF district to another. They criticized the TIF program’s “inflexibility,” which prevents the use of TIF money outside the TIF boundary area, even if the proposed improvement is only across the street from the area. Brown clarified that the TIF money could not be used on “adjacent” addresses.

Brown says the most “appropriate use for TIF money” is for job training and conservation rather than being used in impoverished areas.

Brown also recommended that the city review the TIF fund annually and create a permanent governing board to oversee TIFs , as a way for the city to be more proactive.

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