TIF Transparency Among Big Cities in America

The City of Chicago is sometimes criticized for the lack of transparency associated with its Tax Increment Financing (TIF) program.  We examined how TIF disclosures in Chicago compare to other big cities.  We reviewed public information available on the websites of the 10 most populous cities that use TIF in the United States: New York, Los Angeles, Chicago, Houston, Philadelphia, San Antonio, San Diego, Dallas, San Jose and Detroit.  (Phoenix was not included because Arizona does not have a TIF statute.)

On April 22, 2009, the Chicago City Council adopted Ordinance number SO2009-1529, a TIF Sunshine Ordinance, which requires the City of Chicago to publish certain TIF-related documents online for TIF districts established on or after July 30, 2004.  Documents required to be published include TIF designation ordinances, ordinances authorizing TIF redevelopment agreements, staff reports on TIF projects, economic disclosure statements, TIF overviews and annual reports, and any City-issued Certificates of Completion.

The City of Chicago’s website includes a specific section that shows all TIF related information.  Available TIF documents include maps, overviews, redevelopment plans, designation ordinances, Annual Reports (2004 – 2009) and three-year TIF Projection Reports for each TIF district, development agreements for each TIF project and, for TIF projects in more recently established TIF districts, economic disclosure statements which disclose the identities of the people or entities that comprise the project developer.  These documents provide information including TIF district boundaries, incremental taxes generated in each TIF district, expenditure and balance of the TIF funds for each TIF district, and pledged and paid assistance amounts for each TIF project.

In examining the websites of the other nine cities, we found that three (New York, Philadelphia and Detroit) do not have comprehensive TIF information available online. New York and Philadelphia do not have any TIF district or TIF project information available on their websites at all.  Detroit’s website includes information limited to maps of a few districts, district overviews and brief summaries of some of the TIF projects in the City. 

Although the websites of six cities (Los Angeles, Houston, San Antonio, San Diego, Dallas and San Jose) include comprehensive TIF information at both the district level and the project level, the quality of the TIF information at the project level generally does not match the information available on the City of Chicago’s website. For example, those six cities only disclose summaries of TIF projects while Chicago has made the development agreements of each TIF project available, thereby giving the public a more complete picture of the specific project terms.  

While our research shows that online TIF transparency in Chicago is better in many aspects, Chicago is less transparent than some cities as to the TIF budgeting process.  For example, Houston has a public annual budgeting process and the annual budgets for each TIF district are approved by ordinances adopted by the City Council.  In contrast, Chicago’s annual budgeting process for TIF districts is an internal process determined by the City’s planning department.  Chicago could further improve transparency by making its TIF budgeting process public and adding each TIF district’s annual budget to the City website. 

Chicago TIF information can be found at http://www.cityofchicago.org/city/en/depts/dcd/provdrs/tif.html .

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