Cook County Clerk David Orr today called for a
timeout on creating controversial tax increment finance districts that
retiring Mayor Richard Daley has relied on to spur economic
development during his tenure.
Orr wants the moratorium to last at least until Daley's final term
ends in May and hopes a comprehensive review of TIF districts can be
done in the meantime. It’s not clear, however, if any new ones are
wending their way through the city approval process. Attempts to get
comment from Daley’s administration were not immediately successful.
“TIF Districts are supposed to generate economic development where it
otherwise would not occur,” Orr said. “They were not created to be a
rainy day fund or a safety net when the economy went sour. Too often,
Chicago’s policy has been to collect millions in a piggy bank and decide
how to spend it later.”
Orr isn’t part of city government, and he isn’t running for mayor,
but as something of an elder statesman he decided to weigh in on the
topic, which is one of the hot-button issues among candidates vying to
succeed Daley in the Feb. 22 city election.
Orr said the tough economic times have forced a debate on the issue
after the city declared $180 million in TIF funds as surplus to help
struggling local taxing districts, including the city itself.
The city historically has created TIF districts each year, and a
spokesman for the Community Development Department said they want to
keep their “flexibility” in deciding whether to create more.
are created and the funds generated by them are used to build and
repair roads, infrastructure and sidewalks, create parks and open space,
put vacant properties back to productive use and build affordable
housing, usually in conjunction with private development projects,”
spokeswoman Molly Sullivan said.
Also today, some aldermen pushed a proposal to spend 20 percent of TIF funds on affordable housing each year.
debate became more complicated as a joint City Council committee
approved a measure to make that standard a goal --- but not a
requirement --- of the city. It was proposed by Ald. Pat O’Connor, 40th,
Daley’s unofficial floor leader, and will compete with an earlier
recommendation opposed by the Daley administration to make the 20
percent level a requirement.
O’Connor’s measure also would raise
the incomes of families who could live in the new housing and provide
more flexible financing methods to reach the 20 percent. Ald. Edward
Burke, 14th, chairman of the Finance Committee, said he plans to bring
both measures to a vote before the full City Council.
Preckwinkle, 4th, a supporter of the stricter measure, said she believes
O’Connor’s legislation is more likely to be approved, adding that it
will at least require city administrations to give quarterly reports on
the affordable-housing efforts related to TIFs.
In TIF districts,
the amount of property taxes paid to local taxing districts is frozen
for up to 23 years. Any increase in collections is used to pay for
planning and construction to improve the area.
The idea is to
spur development in blighted areas that would not have seen improvements
without the TIF district, but critics say they city has gone to far in
creating TIF districts in some areas, including a couple in the Loop, as
TIF tax collections have swelled to more than $500 million from about
$11 million during Daley’s nearly 24 years in office.
been criticized for not making the TIF districts part of his annual
budget, even though they account for more than a third of the city’s
property tax collections.
“I’m not against TIFs,” Orr said. “TIF
is a very creative economic took, and in Chicago it seems to have been
taken to the extreme.”
Orr made his comments as he released new county tax increment finance
data for property taxes due next month. You can find that, and
extensive TIF data dating back three years, by clicking here.