FOR IMMEDIATE RELEASE
More information: Tom Tresser, 312-804-3230, firstname.lastname@example.org
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December 9, 2022
CHICAGO HAD A RECORD HIGH $2.3 BILLION IN PROPERTY TAXES IN TIF ACCOUNTS ON JANUARY 1, 2022
BLACK WARDS CONTRIBUTE MORE AND GET LESS FROM TIFS THAN WHITE WARDS
A review of the 2021 annual reports of Chicago’s 132 active Tax Increment Financing Districts (TIFs) by researchers with the TIF Illumination Project has revealed some startling facts about local government finance. The CivicLab has been tracking and reporting on Chicago’s TIFs since 2013. We believe all city residents should know how TIFs manipulate and remove hundreds of millions of dollars of property taxes annually. No other organization does this research. The City of Chicago does not provide this level of analysis.
Our analysis reveals that as of January 1, 2022, there was $2,288,785,618 of property tax revenue collected from Chicago property owners sitting in Chicago’s 132 active TIF accounts.
Other findings of our analysis of Chicago’s TIF districts for 2019 include:
- Chicago had 132 active TIFs in 2021.
- Since the TIF program was created in 1986 Chicago has created 184 TIF districts. A total of 52 TIFs have been closed or terminated. Three TIFs were set to terminate at the end of 2021: River Branch North (#33), North/Cicero (#35), and River South (#37). Since these TIFs were active during 2021 and extracted revenues, they are included in this total.
- Total Property Tax Increment extraction or removal for 2021 = $1,084,751,268. This is the amount of property taxes extracted by Chicago’s TIF districts and diverted from local units of government. This is a record high for Chicago’s TIF program.
- Chicago’s 132 active TIFs have collected a total of $7,927,045,429 since they were created. Chicago’s 52 terminated TIFs extracted $2,327,802,819 in property taxes while they were active.
- Chicago’s TIFs (active and inactive) have removed a staggering total of $10,254,848,248 in property taxes from 1986 through 2021. This is the total takings from Chicago’s TIF Program as best as can be reconstructed from available records. There are no TIF annual reports available from 1986 through 1995.
- In 2021 the Top Ten TIFs collected a total of $606,102,810 in property taxes. These are the “champions” in terms of removing property tax dollars from public use. The biggest property tax extractor in 2021 was the LaSalle Central TIF (#147, created in 2006, due to expire in 2030) which took in $151,520,861. This one TIF has diverted a total of $638,411,008 in property taxes away from local units of government.
- The all-time champion in terms of property tax extraction is the now defunct Central Loop TIF (#014, started in 1984 and cancelled in 2008) that collected a total of $986,767,582.
- In 2021 the Top Ten TIFs in terms of fund balance were holding $989,867,661 in property taxes on January 1, 2022. The TIF with the largest fund balance was the Kinzie TIF (#052, created in 1998, due to expire at the end of 2022) holding $214,467,921.
- Total expenditures from Chicago’s TIFs in 2021 was $307,831,704. This is how much all of Chicago’s TIF districts spent in 2021. The biggest spender in 2021 was the Wilson Yard TIF (#110, created in 2001, due to expire in 2025) paying out $20,742,650. $10,932,824 was payment to the developer of the Wilson Yard project and $6,532,143 was for the Red Line construction upgrade/station project.
- The CivicLab’s TIF analysis reveals how the TIF program impacted majority minority wards. Here are the TIF totals for wards by racial majority (at least 50% White, Black, or Latinx):
|2021 TIF REMOVAL||2021 TIF EXPENSES||2021 END YEAR BALANCE|
|WHITE WARDS (14)||$403,299,978||$114,320,226||$679,930,182|
|BLACK WARDS (18)||$489.025,365||$104,535,065||$1,072,292,539|
|LATINX WARDS (13)||$164,247,586||$48,412,586||$473,164,523|
No racial majority in Wards 1, 11, 49, 50. No TIFs in Ward 41. We are using the ward boundaries in place UP TO the 2023 elections.
Wards that are at least 50% Black contributed 46.8% of all the TIF funds sitting in TIF accounts at the end of 2020 ($1,072,292,539 out of the total $2,225,387,244 TIF Balance at the end of 2021).
Wards that are at least 50% Black received less TIF expenditures than White wards, even though there are four fewer White than Black majority wards.
- Total revenues transferred OUT of TIFs in 2021 was $564,630,152. This means that 52% of the total amount of property tax dollars removed by TIFs was moved or distributed in some way. TIF dollars are moved in two ways: $228,386,438 was transferred from one TIF to an adjacent TIF This is called “Porting.” The other method of distributing TIF dollars is when the Mayor declares a “Surplus.” In these cases, the “surplus” dollars are distributed to the local units of government in proportion to the percentage of property tax dollars those units derive from the property tax collection process. In 2021 that amount was $336,243,714. This was done at the order of Mayor Lightfoot and these funds were used in her 2022 City Budget formulation, including payouts via the Invest SouthWest Program.
- The TIF Illumination Project looked at the TIFs carrying debt and paying financing costs associated with Chicago’s TIF districts. In 2021 9 TIFs used property taxes to pay a total of $17,362,646 to two banks. The banks were:
- In 2021 the Department of Planning and Development took $17,362,646 for administrative costs from the total flow of TIF dollars. This might be called “skimming from the skim.”
- In 2019 97 Chicago TIFs captured at least 50% of the property taxes in their district, of those 22 collected at least 90%. Of those, 6 TIFs extracted 100% of all property taxes collected in their districts. 2021 numbers will be available from the Cook County Clerk’s Office in early 2023.
We have more details from the 2021 analysis available, including:
– “TOP 10” Lists (Extraction, Expenses, Fund Balances)
– TIFs carrying debt and paying finance costs
– TIFs that collected no increment in 2021
– List of TIFs taking at least 50% and 90% of property taxes collected inside those districts
If you would like to see that information, please email us at email@example.com
PUBLIC POLICY ISSUES RAISED BY THIS RESEARCH
TIFS CONTRIBUTE TO INEQUITY AND THE PERSISTENCE OF POVERTY IN DISADVANTAGED COMMUNITIES.
The top performing TIFs are all in or near the Loop or Central City. Having TIF districts across the hottest performing real estate in the city bloats those TIF funds with over $900 million dollars in property taxes that can’t find their way to Black or Brown parts of the city suffering from disinvestment and the “blight” the TIF program is supposed to combat. By contrast, TIFs placed in the poorest parts of the city naturally continue to under-perform and will not produce revenues to improve those communities. In this way TIFs are anti-distributional and contribute to Chicago’s history of neglecting poor communities of color. Ironically, the ward with the most of its land mass in one TIF or another is the 24th Ward which includes West Lawndale, a community that needs serious civic attention and investment.
In 2021 Chicago’s majority Black wards had $489,025,365 property tax dollars extracted by the TIF program in TIF accounts – about 45% of all the property tax dollars taken by TIFs. At the end of 2021 we saw $1,072,292,539 in property taxes taken from Black wards sitting in the TIF accounts. This is an abomination.
Given the fact that the COVID19 pandemic is killing Black people three to seven times the rates that it is killing White people, we have to ask – Why wasn’t that money liberated and put to use for emergency public services and support for those hardest hit communities?
NEW SO-CALLED “ECONOMIC DEVELOPMENT” INITATIVES WILL FURTHER PLUNDER PUBLIC FUNDS
Mayor Lightfoot is exploring building a dome on Soldier Field for a reported $2 billion+ total and asserts that public funds will be used for such a project. She is also getting the city ready to spend hundreds of millions of TIF dollars to convert partially full office towers in the Financial District into high end residential properties. This is a cruel joke on Chicago’s long-suffering communities of color. The CivicLab has documented the use of over $848 million in TIF funds to construct office towers and other commercial properties in the Central Business and Financial Districts. Now the Mayor is proposing to spend MORE public dollars to turn some of those same towers into high-end residential properties. This is a grievous abuse of public dollars and must not go forward.
THE INVEST SOUTH/WEST PROGRAM IS A PITIFUL ATTEMPT TO REDRESS DECADES OF ECONOMIC INJUSTICE
The Lightfoot Administration has made quite a lot of its INVEST South/West Program (https://www.chicago.gov/city/en/sites/invest_sw/home.html). The CivicLab’s analysis of this much lauded project reveals it represents literally crumbs compared to the total dollars moved to support private projects in Chicago’s White wards over the years and pales in comparison to the two “super TIFs” created in April of 2019 – to support the mega developments at Lincoln Yards and Project 78. The INVEST South/West Program proposes to direct $250 million in TIF funds to ten communities of color – or $25 million per community. These communities cover a total of 27,588 acres and contain over 488,000 residents. The two communities where the mega projects will be located cover a total of 303 acres and NO ONE lives there right now. Yet the Lincoln Yards Project (developed by Sterling Bay) and Project 78 (developed by Related Midwest) will receive a total TIF subsidy of $2.4 billion. The CivicLab characterizes this completely backwards public subsidy for so called “development” as an act of economic warfare on Chicago’s Black and Brown residents.
THE TIF PROGRAM IS SECRETIVE AND UNACCOUNTABLE – TIFs REMAIN A SLUSH FUND
TIFs have often been characterized as a slush fund controlled by the Mayor. Our own work substantiates this claim (see http://www.tifreports.com/slush). We have shown here that in 2021 52% of all the TIF funds collected in Chicago are moved out of the area where the dollars have been collected and distributed in a secretive and arbitrary manner.
We also find that the Department of Planning and Development captures $17.4 million from all the TIF dollars that flow through its grasp. This constitutes a shell game that removes money from the public’s view INSIDE of the larger skim of TIF dollars. We call this a “skim inside a skim.”
Mayor Lori Lightfoot has used the TIF slush fund in all her budget formulations. Her first budget address in October of 2019 announced that she would be capturing $300 million from the $1.5 billion sitting in the TIF funds at that time to be used to cover her 2020 budget. This practice continued for her 2021, 2022, and 2023 budgets. Our review show where she took those funds from. This proves that that Tax Increment Financing in Chicago is completely malleable and subject to the Mayor’s will.
IS CHICAGO REALLY BROKE?
We have conducted this analysis of Chicago’s TIFs since 2012. We have found between $1.4 and $2.3 BILLION in property taxes sitting in the TIF accounts at the start of the calendar year. The Mayor, the local media, and major well- funded civic groups repeat the message that we are out of civic funds and that we must pay more in regressive taxes and fees AND suffer service cutbacks. The message of scarcity rings false and is a death sentence for people of color suffering from COVID19 and the baked in racism that is a the “pre-condition” here, backstopping and informing our civic ecosystem.
THE CIVICLAB CALLS TIFs RACIST AND MUST BE ABOLISHED
After nine years of research and over 185 public meetings and over 30 open enrollment workshops, and after talking to and listening to thousands of neighbors in every part of the city, we have reached this conclusion. After talking to activists, union leaders, academics, and reporters in cities across the country, we have reached this conclusion. Tax Increment Financing in Chicago is a racist, unfair, and corrupting program. It can’t be reformed as it is structurally unsound. TIFs do not work and cannot work in any equitable manner. We call for the abolition of TIFs in Chicago and across the USA. We have listed our arguments at www.endtifsnow.org.
THE CIVICLAB IS WORKING WITH ACTIVISTS IN FIFTEEN CITIES AROUND ECONOMIC JUSTICE CAMPAIGNS
The CivicLab is not alone in its rebuke of Tax Increment Financing Programming. We are working with activists in fifteen cities around campaigns for economic justice that are centered on local TIF abuse and secrecy. We are working with neighbors in Evanston, Berwyn, Cicero, Dolton, Elgin, Olympia Fields, and Homewood – all in Illinois. We are also in collaboration with organizers in Detroit, Cincinnati, Davenport, Louisville, Paducah (KY), Minnesota, Oklahoma, and Texas. See http://www.tifreports.com/tif-organizing-services for details.
The TIF research was conducted by Lead Organizer Tom Tresser (www.tresser.com). Tom is a long-time civic educator and public defender in Chicago. He was the co-founder of the CivicLab with Benjamin Sugar. The CivicLab operated a co-working/maker space for two years in the West Loop and closed on June 30, 2015 (www.civiclab.us). The civic research, training, and tool making continues under the stewardship of President, CEO Jonathan Peck and Vice President Phillip. The CivicLab is a Black led 501 c 3 tax-exempt “do tank” dedicated to research, activation, and capacity building for grassroots democracy, government accountability, and social justice work. Our work expands public imagination and civic possibility.
In 2008 Tom was a co-founder of Protect Our Parks which sued to stop the privatization of Lincoln Park (www.wesavedlincolnpark.org). In 2009 he was a co-organizer of No Games Chicago which worked to defeat the bid for the 2016 Olympics (www.nogameschicago.com). He curated and published “Chicago Is Not Broke. Funding the City We Deserve” in July of 2016 (www.wearenotbroke.org). In May of 2017 he co-founded The POWER Institute (People Organizing to Win, Engage & Resist) with Jonathan Peck (www.powerinstitute.us). He can be reached at 312-804-3230, firstname.lastname@example.org
The TIF Illumination Project is online at http://www.tifreports.com. Since 2013 it has revealed the impacts of TIFs at the ward level. We show how much property taxes are extracted from inside each ward by the TIFs IN that ward. The TIF Illumination Project distributes this information at TIF town meetings, or Illuminations, that have been independently organized by residents of the community. Since February of 2013 we have been invited to present at over 185 public meetings in front of over 14,000 people. Our heartfelt thanks to the dozens of volunteers who help organize these meetings. A record of these meetings is online at http://tifreports.com/tif-town-meetings. Presentations from these meetings can be purchased at our TIF Data Store at http://www.tifreports.com/store. Our online presentations at https://tinyurl.com/CivicLab-Presentations have been viewed over 260,000 times.
We have produced two TIF training videos via crowdfunding campaigns. “TIF 101” (22 minutes) explains the basics of Tax Increment Financing and features Professor Rachel Weber from the University of Illinois at Chicago and Cook County Clerk David Orr. “TIFs Off the Rails – Public Policy Problems with Chicago’s TIF Program (17 minutes) features Professor Richard Dye of the University of Illinois and Professor Stephanie Farmer of Roosevelt University. These videos are available on YouTube at http://www.tifreports.com/training_videos.
Over 925 people have contributed to our work since 2013. Thank you!
The CivicLab gratefully acknowledges the support of the Voqal Fund which helped keep the CivicLab open in 2014 and thus provided a base for the TIF Illumination Project to do get started. We are also thankful to the Sum All Foundation, the MoveOn Action Fund, the Crary Family Fund, and the Crossroads Fund for their past support. The Chicago Community Trust funded our 2018 Civic Harambee in August of 2018 through their “On The Table Program.” We acknowledge the support of the Joseph and Bessie Feinberg Foundation, Leonard C. Goodman, the Crown Family Philanthropies, and the MuckRock Foundation. We have also received support in 2018 and 2020 from Illinois Humanities.
In August of 2021 the TIF Illumination Project was named a finalist for the MIT Solve MIT Solve Global Challenge “Antiracist Technology in the U.S.” Seven winners were chosen from the 15 finalists from this challenge. There are four other global challenges and over 1,800 solutions were submitted from 29 countries. The 35 winners across all five challenges will share in a $2 million prize pool. Our solution is at http://tinyurl.com/Vote-4-CL-Tech-Challenge.