Exposed: Wealthy Recipients of TIF Funds

Work best for wealthy

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    NEWSLETTERS

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    Mayor Daley's favorite economic development tool - the now-famed tax increment financing district (TIF) - has been touted for years as a way to invigorate "blighted" areas of the city. But a Reader examination of the TIF budget finally released by the city shows what TIF critics have long suspected: TIFs help the rich get richer.

    Take that new French Market that just opened downtown.

    "In the case of the market, the City Council, at Daley's urging, voted in 2006 to spend a total of $12 million in taxpayer money on construction of a new shopping area in the Ogilvie Transportation Center; $8 million of that sum went to the French Market," the Reader reports. "The project happens to be headed by a well-to-do, politically connected developer who's contributed thousands of dollars to the mayor's campaign coffers. And the city plans to spend another $23 million in the River West TIF district through 2011.

    "By contrast Roseland, one of the poorest neighborhoods in town, will get just $5 million to spend through 2011.

    "That's typical of how the TIF program works citywide, according to the Daley administration's own budget for the program - a document that the Reader obtained through a series of Freedom of Information Act requests and posted at chicagoreader.com last Friday."

    Indeed.

    And it only makes sense: The more affluent an area is, the more tax money can be hoarded and then re-invested. The problem is that affluent areas are basically keeping tax money for themselves, leaving everyone else to suffer. That blows a hole in the economic development theory of, say, pouring money into areas like downtown at the expense of neighborhoods because the tax revenue generated - from tourists, for example - can then help the whole city. Not if the most affluent TIF districts keep the money for themselves. That's why TIFs were designed to be used in blighted areas, not wealthy districts (or for corporate subsidies, which is another Daley favorite).

    TIF districts also give the mayor unprecedented political leverage.

    "The mayor ultimately controls these accounts, which gives him leverage over every public entity, from the City Council to the public schools to the Park District," the Reader notes. "[A]t least half a dozen aldermen have told us that mayoral aides pressure them on key votes - such as the ordinances for funding the Olympics or moving the Children's Museum to Grant Park - by either promising to give their wards more TIF dollars or threatening to take TIF dollars away.

    "The more TIF districts are created, the more money goes into the TIF accounts and the more powerful the mayor becomes. . . .

    "For instance, in 2007 Governor Rod Blagojevich called in county board commissioner Mike Quigley, then the city's most prominent TIF reformer, to talk about the program to a group of key legislators, including Illinois house speaker Michael Madigan. Daley shrewdly countered by sending in two Hispanic aldermen, George Cardenas and Ray Suarez, and two African-American aldermen, Latasha Thomas and Carrie Austin.

    "When Quigley noted that several academic studies had shown that TIFs actually benefit wealthier communities over poor ones, Austin cut him off, saying: 'Professors never built nothin'."

    So add one more strike against TIFs: The facts about them don't seem to matter to our elected officials.

    Steve Rhodes is the proprietor of The Beachwood Reporter, a Chicago-centric news and culture review.