Mayor Rahm cuts school budget while the city’s TIFs are flush with money
Why cut $140 million from CPS when there’s $461 million in TIF money available?
- PAUL JOHN HIGGINS; GETTY IMAGES/ISTOCKPHOTO
On July 21, Mayor Emanuel broke the bad news to Chicago Public School parents, teachers, and students: Sorry, but we have no money, so I’m going to have to cut another $140 million from our schools—even with all the hype over the so-called bailout deal in Springfield.
Coincidentally, at about the same time, Cook County clerk David Orr was telling the mayor: Yo, Rahm, looking for millions for CPS? I know where you can find it—right there in the city’s good old TIF bank accounts.
Every year Orr prepares a report that reveals just how much property tax money the county will deposit into the city’s TIF accounts. And according to this year’s report, the county will be sending Chicago TIFs $461 million.
So here’s the big question: How many millions will Emanuel cut from the schools before he grudgingly takes Orr’s advice and turns TIF money over to CPS?
Yes, folks, it looks like the time has come for me to take another deep dive into the fecund swamp known as our tax increment financing program.
And that means I’ve come to that point in the story where I have to explain—for, like, the millionth time—how this sucker works. I’m starting to feel like a high school math teacher in Governor Rauner’s hometown of Winnetka trying to explain the joys of algebra to a class filled with ninth-graders who’d rather be doing something else.
The TIF tax is effectively a surcharge the city adds to your property tax bill. Eventually, the money is distributed to one of 146 bank accounts—corresponding to the number of TIF districts in the city—controlled by the mayor.
Why, you might ask, is the county clerk involved in these shenanigans? Good question.
In our convoluted system, the mayor doesn’t have the authority to directly deposit property taxes into the TIF accounts, even though he controls the money once it’s been deposited.
Instead, we follow a scenario that works like this: You, the property owner, send your property taxes to the county treasurer. And the county clerk tells the treasurer where that money will go.
Thus, the clerk ordered the treasurer to deposit the aforementioned $461 million into the TIF accounts.
I guess you could say that Orr is sort of an enabler in this scam—not unlike the bartender who serves one last drink to a drunk.
Of course, Orr has no say in the matter, and he’s one of the few officials who dare to criticize the mayor’s TIF program.
Clearly, Orr doesn’t want to be blamed for a program that robs from the poor to feed the rich while accruing more power for a mayor who already has too much power to begin with.
So every year he prepares his report. Really, it should be coming from the mayor’s office, but the mayor wouldn’t reveal how much extra we’re all paying in taxes unless you yanked out his wisdom teeth without Novocain.
So thank you, Clerk Orr.
Among the revelations in Orr’s report: Once again the biggest winners in the TIF game are those relatively wealthy areas in and around the Loop, even though the program’s intended to improve blighted communities.
For instance, just one downtown TIF district, the LaSalle Central TIF, will receive $26.7 million.
In contrast, the three TIFs in Englewood—one of Chicago’s poorest neighborhoods—will receive about $7 million total.
This year the city’s TIF districts generated 24 percent more money, or $89 million more, than they did last year.
Now I get to explain why that’s so. Lucky me.
If you own property, your tax bill is calculated by multiplying the citywide tax rate by the value of your property. The higher the tax rate or the more valuable your property, the more you pay in taxes.
This year taxpayers were hit with a double whammy. Their properties rose in value while the mayor raised the tax rate to fund past-due payments to the police and firefighters’ pension funds.
I applaud the mayor for finally making good on the city’s financial obligations.
But by jacking up the tax rate, he also added another $25 million to the TIF slush fund, according to the clerk’s report.
These millions have nothing to do with police, firefighters, or pensions. But that won’t stop the mayor from trying to hoard it.
If I were the mayor—yes, I know, utter fantasy—I’d figure some way to get most of the $461 million to the schools. That way, principals wouldn’t be told to use special education money for basic classroom expenses, as the mayor’s currently commanding.
Apparently the mayor has a different perspective on education. So my bet is that he’ll let the treasurer quietly deposit that $461 million into those TIF bank accounts while pretending the money’s not even there.
That way he gets to use it for stuff like redeveloping the South Loop parcel known as Rezkoville—currently my favorite potential TIF boondoggle.
But that’s where you—the people—come in.
Apparently, all these years of pounding the TIF drum have had some results.
Most of you have mastered the most rudimentary understanding of this scam. That is, when you see TIF you think it’s bad news. Beyond that, you’re a little shaky.
Still, if enough of you raise a stink over that $461 million, the mayor will have no choice but to share the wealth, so to speak.
You watch: He’ll call a press conference to announce that, through his command of the budgetary process, he’s magically discovered a surplus in the TIF fund that he’ll kick back to the schools.
At which point his supporters in the city will fall to their knees and proclaim: Oh, thank you, bwana!
Thus he’s free to continue siphoning TIF money from the schools andspending it on luxury developments.
And so the TIF game continues.
I hope a time comes when it’s more than just a relatively small number of parents and officials (and one crotchety old reporter) who’ve caught on to this scam.
Unfortunately, that will be too late for those unlucky students currently attending the dead-broke schools in Mayor Rahm’s Chicago. v