Shining a Light on the "Only Game In Town"

Tax Increment Financing (TIF) is a community development program that uses the property taxes collected on the incremental growth in property values in “blighted” areas to fund private investment and infrastructure improvements in the area.    In the City of Chicago, when an area is approved to become a TIF district, the Cook County Clerk designates a base Estimated Assessed Value (EAV). The usual taxing districts, like the schools, parks, and libraries, receive property tax revenue based on the base EAV. The property taxes collected on the difference between the base EAV and the new EAV are then supposed to be invested into the development of the district. 

The use of TIF in Chicago has been a subject of a great deal of scrutiny for a lack of clarity and for the implementation of TIF districts in areas that already show signs of growth and development. During the process of starting a TIF district, the district holds open meetings and forums for community participation.  However, after the TIF district has been approved, there are few opportunities for community members to give their feedback on the development process or the use of the funds raised by TIF. 

To promote transparency in TIF usage in the City of Chicago, the City Council passed the Tax Increment Financing Sunshine Ordinance.  The Ordinance, which passed by a 48-0 vote in 2009, was passed to allow taxpayers access to information on the use of TIF funds without having to file a FOIA request. It calls for each active TIF District to publicize information regarding the establishment of the TIF District, employment data, as well as the annual reports submitted to the City’s Community Development Commission.  Starting in 2014, the Chicago Department of Housing and Economic Development was required to post even more detailed information on each TIF district. On the TIF data portal, there is a searchable map that allows the general public to see the boundaries of Chicago’s 165 TIF districts and information regarding the infrastructure and redevelopment projects within them. (http://webapps.cityofchicago.org/ChicagoTif/)

This is an important step towards improving the public understanding of the use of TIF in their neighborhoods. Moving forward, publication of the underlying reasons for the designation of each district as a TIF district could also help promote understanding. Since TIF districts are supposed to go in areas that are either blighted or in danger of blight, publicizing the blight factors present in an area (like age of structures, inadequate utilities, dilapidation, or lack of community planning) could encourage accountability in the decision making process and make it easier for taxpayers to understand the problems that the TIF money should be used to remedy.