Letter To The Editor As Printed December 13, 2010
Tax-increment financing has succeeded dramatically in Chicago, helping to leverage billions of dollars in private investment and create upward of $500 million annually in new tax revenue set aside for capital projects and future economic development (“Review, rewrite law to rein in TIF districts,” Our View, Nov. 22).
Critics rip TIF as an all-purpose subsidy for favored projects, claiming excess funds are retained by the city without sufficient accountability. Crain’s supported Cook County Clerk David Orr’s proposed moratorium on new TIFs, echoing this ill-advised and poorly thought out call to arms against this too-successful economic development program.
TIF districts must meet state guidelines that include how the funds must be spent. Mayoral candidate Rahm Emanuel has some good ideas about using excess funds for police (although it might require a little juggling to comply with state law). Mayor Richard M. Daley is releasing $180 million in surplus funds to the taxing districts. Hasten the political debate regarding the use of excess funds, but don’t kill the golden goose.
Who benefits from a TIF? An exhaustive analysis by our firm of the 154 TIF projects in the city from 2000 through 2008 (the most complete data at the time) determined that more than half of TIF funds were allocated for public infrastructure, educational or public facilities and housing including affordable components. So the private-development incentives that created the new tax revenues were balanced with capital spending for public benefits.
SAMUEL POLSKY
Principal, Polsky & Associates Ltd.
To view the article as posted in Crain’s, click here.