(In case you’re not in the mood for 40-minutes of conversation about Tax Increment Financing, we’ve provided times so that you can jump to that particular topic.)
Chicago’s budget director Alex Holt drops in to talk TIFs.
Holt argues that TIFs have funded a large number of capital improvements throughout the city – improvements that couldn’t have been made without the extra dollars the program brings in. This is especially true, she says, for CPS, which has caps on its property tax levy and is therefore unable to raise the funds it so desperately needs to replace roofs, windows, boilers and bathrooms – as well as build annexes and, in some cases, new schools.
We address the criticism that TIFs are actually hidden taxes. She argues they are not, but agrees, when gazing into our bathtub analogy, that we do all pay a little extra money each year in taxes to replace the funds drawn away by TIFs. But it’s a very, very small amount, she argues, asserting that the TIFs multiply the effect of that small contribution to build and remodel el stops, encourage companies to build factories and stores, and improve conditions in myriad public buildings. (about 10:30)
Alex Holt gives a clear-throated justification for the LaSalle Central TIF, which was created years before she went to work for the budget office. LaSalle wasn’t blighted 20 years ago, she argues, but it was slipping. Lots of second-rate office space was going unrepaired. The streetscape was sub-par. And the street was in danger of losing its appeal as a first-class Midwest destination for big capital. That’s not true today, she argues, and she stresses that TIFs played a role in the revival. (22:16)
We ask Holt to address the persistent criticism that Chicago’s schools have been robbed of hundreds of millions of dollars over the past 20 years as money was siphoned into TIFs. It wasn’t, she says, and you can see her response at about 24:50.
Finally, we talk about the 1.4 billion dollars that is currently parked in banks, money the critics have argued shouldn’t have been collected in the first place and should be “returned” to the agencies from which it was taken. It wasn’t “taken”, she argues, since CPS gets every penny it requests in taxes each year, by law. (31:30)
And she says that 1.3b of the 1.4 is encumbered for existing projects, many of which stretch over 4 or 5 years. Reminded that her office has been excoriated by Tom Tresser and the TIF Illumination Project for not responding to their requests (and FOIAs) for detailed lists of the projects, she responded that all the data is now publicly available.