“The deepest problems of modern life flow from the attempt of the individual to maintain the independence and individuality of his existence against the sovereign powers of society,” says sociologist Georg Simmel.
The city of Chicago has slowly been chipping away at the existence of the Black community, and nobody knows this better than Tom Tresser, editor of the provocative new read Chicago Is Not Broke. He has assembled a team of subject matter experts who each have contributed a chapter dealing with waste, corruption or best practices on ways to manage a better Chicago.
Tresser, who headed the TIF Illumination Project, tracks the city’s Tax Increment Finance districts, better known as TIFs. TIFs, which came into existence in 1986 under then-Mayor Harold Washington, were envisioned as part of an economic development agenda that would renew Chicago’s neighborhoods and extend prosperity and new construction beyond the Central Loop district, according to Tresser. Instead, “TIFS work against the poorest parts of Chicago” by “handcuff[ing] taxes in communities where they’re created.”
For example, if you lived in Englewood or Austin and needed to build a new library but there’s not enough TIF money in your district, but there were millions sitting in a TIF in the South Loop, based on TIF rules, the property taxes sitting in another TIF district could not be used to help the people in Englewood or Austin even though it’s all the same city.
Currently, there are 147 active TIFs across the city, and the total amount sitting in the accounts at the start of 2016 was $1.3 billion. Tresser says that TIFs siphon money away from local taxing bodies such as Chicago Public Schools and the Park District. Say, for example, a homeowner pays a $1,000 tax bill; prior to the TIF, the entire $1,000 would be split among the public schools, public parks, public libraries, city colleges and the city itself.
However, when a TIF is created, a portion of that $1,000 is captured off the top, based on the TIF rate. If that rate is 50 percent, then $500 goes into the TIF account and the remaining $500 is split between the various agencies. The Defender asked Tresser, “Is this one of the reasons the city is experiencing shortages in their budget?” Tresser insists, “It’s a manufactured shortage. The money has been collected. We just can’t put our hands on it.” TIFs, he says, are controlled exclusively by the mayor.
“The budget deficit is a direct result of actions or inaction by Mayors Richard M. Daley and Rahm Emanuel,” says Thomas Gradel. He and former Ald. Dick Simpson (44th Ward) track the cost of corruption and together co-authored Corrupt Illinois: Patronage, Cronyism and Criminality published in 2015. “For every individual tried and convicted by the federal government,” says Simpson, “there are 10 others who aren’t convicted because the evidence isn’t there.”
Since the 1970s 2,000 individuals have been convicted of corruption in Illinois and 20,000 plus are playing the game. This puts taxpayers on the hook for a “corruption tax,” the two assert, to the tune of $500 million annually.
Potter Jackson, coordinator for the Chicago Teachers Union (CTU), attributes part of CPS’ budget woes to the exorbitant interest that CPS is paying out on “interest rate swaps.” These toxic deals are the results of former CEO of the Board of Trade, David Vitale, who was also president of the Board of Education, twice from 2003 to 2008 and 2011 to 2015.
“As a banker, he was the central booster for the CPS to [engage in] interest rate swap liabilities,” according to Jackson. These toxic deals have cost CPS millions of dollars. “Half a billion alone” for CPS, says Jackson, and another $500 million to the city of Chicago. When asked, “what can taxpayers do to stop this from happening?”
Jackson replied, “Ask the mayor and the attorney general to prosecute the banks. Demand that our state and city government pay the banks last and social services first.”
Cook County Clerk David Orr’s office just released a new TIF report announcing a 23 percent increase in the amount of property taxes collected by TIFs. The staggering amount collected in 2015 was $460.6 million with $166 million being declared a “surplus.”
Orr has publicly called for public discussion this fall during budget hearings in the City Council “. . . regarding the allocation of these funds.” With a surplus being declared, he added that an audit might uncover additional money that could be returned to the general budget as a surplus. A comprehensive audit of TIFs has never occurred in Chicago.
Stay tuned, there’s more to come from the other subject matter experts on how to fund the city we deserve.
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