Mayor Johnson stripped neighborhoods of improvements by raiding TIFs

If you live in a struggling Chicago neighborhood and you set aside a portion of your tax dollars to redevelop your neighborhood, you should be able to trust the city will use that money to improve your community.

That’s why the Illinois General Assembly created the tax increment financing program. That’s why residents of these neighborhoods support them. That’s what the legislation we are championing in the General Assembly will spell out.

But that’s not what’s happening right now.

Mayor Brandon Johnson's city budget last year raided $1 billion from neighborhood TIF districts all over the city. The City Council revised the mayor's budget but kept his raids on TIFs. Here's what neighborhoods lost: $11 million from Humboldt Park; $5 million from 87th & Cottage Grove; $13 million from Belmont Central; $7 million from Englewood; $8 million from Galewood; $125 million from Pilsen.

Residents and businesses in these neighborhoods dutifully paid into these TIF funds so that money could be used to bring economic development into these neighborhoods. They were not created to be slush funds that a mayor or council snatches when they're unwilling to look for efficiencies in the city budget and just need to plug a massive hole.

But those funds are now forever gone from Humboldt Park, Englewood, Burnside, Belmont-Central Galewood and Pilsen. Wondering why your property taxes are going up? Without the economic development these TIFs were supposed to bring, homeowners must make up the difference. Thanks to the billion-dollar raid, raising funds to develop these neighborhoods must now start all over again.

Proposed law would put strict limits on TIF ‘cookie jar’

So we have joined with state Sen. Bill Cunningham, D-Chicago, and state Rep. Bob Rita, D-Calumet City, to introduce legislation in the Illinois Senate and in the Illinois House of Representatives to prohibit mayors from raiding TIF funds to plug temporary budget holes.

These bills would limit a mayor’s ability to declare unspent TIF funds “surplus,” take them out of the neighborhoods and use them to boost spending at City Hall. This legislation will handcuff city officials tempted to plunder the TIF cookie jar by limiting them to taking only 5% of the TIF funds once every 10 years.

Here’s another shortsighted and outrageous part of raiding TIF funds: The city gets only 23 cents on the dollar. Seventy-seven cents of each of those dollars get sent back to other taxing bodies that didn’t even ask for them — the schools, Cook County government, the Metropolitan Water Reclamation District. Money raised in Englewood can be spent in Wilmette. Funds from the Pilsen TIF can be spent in Arlington Heights.

This legislation would stop this bad habit that successive Chicago mayors have engaged in. Other towns around Illinois have not abused TIF districts the way Chicago has. TIFs are a statewide program that have worked to revitalize blighted neighborhoods. Since our time working together at the Chicago Department of Planning and Development more than 20 years ago, we’ve seen how TIFs can be used to generate economic prosperity and transform neighborhoods.

Used right, TIFs help economy

TIFs used right can be a key component to growing our economy, and maintaining affordability and reasonable property tax rates for residents.

A TIF district caps the amount of property taxes that may be collected from homes and businesses in a district starting the year the TIF is formed. Taxes above that baseline amount are put into a fund for development projects for that district until the district sunsets in 23 years. Ideally, the improvements have made the district safer and less blighted, and allowed residents and businesses to flourish by the end of the TIF’s term.

TIFs, when used as intended, have great results. Look at the Englewood Square shopping center, built with TIF money raised in Englewood, bringing a grocery store to what had been a food desert, a health clinic, a PNC bank branch, a Starbucks and a Chipotle. Look at the building going on in Roseland: stores, restaurants and amenities that make neighborhood living enjoyable.

My office collects data from TIF districts all over the state every year. We post the information on my website www.illinoiscomptroller.gov for you to see and judge how the TIFs are working. You can be the judge: Are they living up to their potential?

Not if a mayor is going to empty them to plug one year’s budget hole.

Please encourage your state legislators to support these bills to keep neighborhood money in the neighborhoods and allow the TIF districts to function the way they were intended, breathing new life into struggling neighborhoods. This legislation might make life a little tougher for tomorrow’s mayors who won’t be able to raid TIF funds to plug budget holes. But Illinois’ cities and neighborhoods will be better off.

Susana Mendoza is the Illinois state comptroller. David Doig is president of Chicago Neighborhood Initiatives and formerly served as first deputy commissioner of planning in Chicago.