According to media reports, the City of Chicago may consider using uncommitted TIF money to reduce the City’s 2011 operating deficit.  According to the Chicago Tribune, the total balance of Chicago’s TIF accounts is approximately $1.2 billion, of which approximately $500 million has been committed to specific projects, leaving approximately $700 million in available funds.  However, even if the City elects to tap into TIF funds for additional revenue, Illinois TIF law will dictate what portion can be used by the City. 

According to the Illinois TIF Statute, TIF revenue is typically used for redevelopment purposes in the TIF districts where the incremental tax was generated.  However, the City may elect to free up excess TIF dollars from TIF accounts by proportionally distributing the excess funds to all of the taxing bodies that overlap the City’s TIF districts.  For example, the general 2008 property tax rate for the City (established in October 2009) was 4.816%, consisting of 0.928% for the City of Chicago, 2.472% for the Chicago Board of Education, 0.415% for Cook County and 1.001% for the remaining taxing bodies.  If $700 million in TIF money is distributed proportionally to the various taxing bodies, the City may only be eligible to receive approximately $135 million, or 19.3% of the distribution (0.928% / 4.816% = 19.3%).  More than 50% of the excess funds, or approximately $360 million, would go to the Chicago Board of Education.

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