Tax-increment financing districts, which have been the subject of criticism by Mayor Rahm Emanuel in recent weeks, generated $807 million in revenues in 2010, 3.8 percent less than the year before, Cook County Clerk David Orr said on Thursday.
The TIF report came a day after Emanuel announced during his budget address that the city will begin annual evaluations of the performance of tax-increment financing funds. Emanuel’s proposed city budget would also declare as surplus $60 million in tax-increment financing funds, allocating about half to the city schools and about $12 million to the city. The remainder of the surplus would go to other local governments.
According to the county report, Chicago collected $510 million in TIF revenues for the 2010 tax year, down slightly from $520 million in 2009. Revenues declined in about half of the TIF districts in Chicago. In the suburbs, revenues from TIF districts fell to $297.8 million in 2010 from $319.3 million in 2009, a 7 percent decline. About 21 percent of suburban TIF districts saw revenues decrease.
The decline in county TIF revenues, due to the decline in the real estate market and the expiration of some TIF districts, continued a trend since TIF revenues peaked in 2007 at $892 million, Orr said.
The TIF revenues come from 425 active tax-increment financing districts in Chicago and the suburbs, including seven new tax-increment financing, or TIF, districts in Chicago and eight new districts in suburban Cook County.
Tax-increment financing is a tool intended to spur economic development in blighted or struggling areas. But it has drawn criticism for what some see as a lack of accountability, as well as for a concentration of TIF spending downtown, rather than in poverty-stricken neighborhoods.
In areas designated by municipalities as TIF districts, the amount of property taxes that can be collected by local taxing bodies–including the city, schools, park district and other agencies–remains frozen for 23 years. Any new tax revenues that result from rising property taxes, called the tax increment, must be spent within the district or a neighboring one.
Orr, who has long been a critic of the TIF program, said he supported the reforms proposed by Emanuel and a TIF task force the mayor created. Orr urged the mayor to go even further.
Orr has called for all TIF proposals, contracts and expenditures to be publicly vetted, allowing public comment prior to the approval of any new TIFs, and developing an action plan for closing TIFs when development goals are met.
“Such an overhaul takes time, and it appears Mayor Emanuel is headed in the right direction on TIFs,” Orr said.
Three TIF districts in Chicago ended, while seven new ones were added, at 63rd and Ashland, Calumet River, Ewing Ave, Lakeside Development Phase I, Montrose and Clarendon, Randolph and Wells and West Woodlawn. Orr noted that all of the new TIFs were approved prior to Emanuel becoming mayor last May.
Nine suburban TIF districts ended in 2010 and eight new suburban TIFs were added, in Alsip, Countryside, Justice, Melrose Park, Midlothian, Olympia Fields, Skokie and South Chicago Heights, according to the report.