It’s a pretty familiar sight. The Mayor, and perhaps an alderman or two, standing at a podium in front of a vacant lot or a dilapidated warehouse building, announcing that, thanks to a property tax credit, this construction project will hire X-number of Chicagoans, or maybe retain hundred or so jobs in the city.
Claudia Morell has seen dozens of these project announcements as she covers City Hall for the Daily Line. And she wondered how many of them there were. And how much they were costing Cook County taxpayers. And how many jobs really were created or retained. She still doesn’t have all the answers, but a big picture is emerging.
“Since May 2015 among the 60 applications total tax savings is about $92-million, Morell explains. And the tax breaks, once approved, last for many years. “For example most industrial properties the set rate is 25%, but if a developer applies for a Class 6B tax break which is made to incentivize people to buy old dilapidated industrial warehouse property in Chicago which there is still a lot of, and if they are approved for the break they get a 10% tax rate for the first ten years, and then it is increased to 15 the following year and then to 20 the year after.
But with so many developers getting the tax beak, and the program running for years at a time, who’s monitoring the program to be sure those promised jobs materialize and remain in Chicago? “Aldermen have been asking what is the process the Department of Planning and Development uses to make sure that developers are fulfilling their promise in terms of job growth, and if they are actually putting the money towards rehabilitating these projects,” Morell says.
Monitoring the program is critical, Morell explains, because it extracts $92 million from the total Cook County property tax base, and every other county resident has to make up the difference in our own property tax bill.
And, at this point in time, there’s no real way to know how many jobs have been created or retained. When Morell adds up all the promised jobs and divides it by the $92 million she arrives at an estimated cost.
“Yes, $8,500 per promised job,” she declares.
But there’s a catch. How long must those jobs last? And should the jobs of construction workers who work for a few months in the initial phase be considered as new jobs?
“That includes retained temporary construction and permanent jobs , but when you just do new permanent jobs and construction that goes up to like $10,000 a job. And then if you do just permanent jobs, it’s like $23,000.”
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And you can read the transcript HERE:CN Transcript June 22 2017 Claudia Morell