Chicago Tribune: Making TIFs work for neighborhoods

The following article originally appeared in the Chicago Tribune on October 23, 2013. A link to the article can be found here.

The problems with Chicago's Tax Increment Financing program are well-known. A program that was originally intended to invest in blighted areas moved far from its original purpose and became more commonly associated with Fortune 500 companies. Shrouded in secrecy, TIFs became a slush fund for pet projects that had questionable economic development outcomes.

During my 10 years as a Cook County commissioner, I was a vocal critic of the broken TIF program and issued a report calling for a number of reforms. While reforming TIF to its stated goal can't happen overnight, recent actions by the city to restore the program and rebuild the public trust represent important and much-needed changes.

Since 2011, Chicago's TIF Reform Task Force has been working to increase transparency and accountability. TIF data is now available online and project scorecards directly address the potential economic development purposes of any project. The public and the City Council are more informed than ever as to whether projects can meet their intended goals. We can decide for ourselves as to whether a project is a good idea or not.

New efforts focus on neighborhood TIF projects — building schools and parks, attracting jobs to communities in need and targeting areas of the city that have not naturally seen growth themselves. All of these are exactly in line with the intended purpose of the program and reflect feedback from the TIF reform committee.

Mayor Rahm Emanuel's latest announcement — that every year at least a quarter of the unused resources in the TIF program will be returned to the taxing bodies — is another important step in the right direction and builds on a series of reforms he has implemented over the past two years. It sets a clear and transparent policy for returning uncommitted funds to various governmental organizations, including the public schools, which will get about 50 percent of the resources.

Perhaps most important, the TIF Accountability ordinance passed this summer puts many of the TIF panel's reforms into law so that subsequent administrations must follow the same level of transparency and accountability.

While we should all continue to be vocal watchdogs of this program, it should not be used as a political pinata. Detractors want to cancel the TIF program entirely, but even aldermen who have raised legitimate questions about TIFs come to the ribbon cuttings in their wards for projects funded by TIF dollars. That's because TIFs, when used for their original intent, are good for neighborhoods that have trouble generating their own private investment. It's easy to say the resources should be reapportioned to other causes, but critics have not proposed smart, transparent ways to separate good TIF investments from questionable ones.

There is no question that many projects lined the pockets of wealthy developers instead of helping Chicagoans find jobs. However, TIFs, when properly utilized, play a critical role in economic development in the city (just ask the countless neighborhoods that rely on TIF-funded parks or the small businesses that get job training and business development funds from their local TIF).

More transparency and information can help keep TIF funds where they do the most good and return the rest to places like Chicago Public Schools, which are in dire need of funding to better educate our children. The recent announcement and the reforms recently implemented by the city mark important improvements to the TIF program and are, it is hoped, a sign of more to come.

U.S. Rep. Mike Quigley, D-Ill., is author of "A Tale of Two Cities: Reinventing Tax Increment Financing."