Where did all the parking meter money go? David Roeder of the Chicago Sun-Times tells us. To fill holes created by deals like this:
Last summer, owners of Willis Tower, the former Sears Tower, announced plans for a $350 million hotel next to it, plus a top-to-bottom renovation of the skyscraper to conserve energy. Given the economy and the finance market, nothing has happened since then but some talk with the city, and apparently that hasn't gotten far.
Perhaps that's because the tower's team has been shopping for a whopping subsidy, at least $100 million under the tax-increment financing program, said Ald. Robert Fioretti, whose 2nd ward includes the property. Fioretti said the original request was in the $200 million range, and that he keeps telling the developers to curb their appetites. "I tell them I've got a lot of other things to use TIF money for," he said. Fioretti added that "they are a long way away" from a deal with the city
Tying together two of my recent posts, The Chicago Reader's Mick Dumke and Ben Joravsky finally got some details out of the City of Chicago about it's TIF program through the FOIA process. Though not surprising, it's nice to be able to put actual numbers to your suppositions.
1. Mayor Daley and his top aides defend the TIF program as the city's chief tool to fight economic decline in depressed neighborhoods. But the budget itself shows that the wealthier downtown TIF districts bring in far more extra tax funding-and thus have far more to spend-than impoverished neighborhoods on the south and west sides.
To cite one example: the Ogilvie Transportation French Market, a project Mayor Daley touted yesterday, got $12 million from the River West TIF district (whose projections are on page 132 of the budget document). That's nearly twice as much TIF money as the total available next year to the Englewood Mall, Englewood Neighborhood, Roseland/Michigan, 95th/Stony Island, 69th/Ashland, and 63rd/Ashland TIF districts combined.
2. What qualifies as an "economic development" project varies so widely-among the various projects are school construction, ornamental street lighting, traffic studies, and subsidies for corporations, a bakery, and a theater troupe-as to make the term either all-encompassing or meaningless, depending on your perspective.
It seems that the solution of so many of Chicago's fiscal problems lie in these secret slush funds (including redeeming the parking meters and not selling the fresh water services), that I'm happy that even the MSM (whose owning corporations benefit from some of the secret corporate giveaways) are starting to report on them. Looking forward to Mr. Dumke and Mr. Joravsky's next story when they get through digging through the City's info dump. What do you think?
The Chicago Reader has a sensational story in it today, but, as usual in this town, the story with the real impact on the lives, services and taxes of Chicago's citizens is probably going to go virtually unnoticed right next to it.
The story titled "Transparency in Action - How a bill intended to expand the state Freedom of Information Act was bastardized to expand the mayor's shadow budget", by Ben Joravsky, talks about how the state legislature snuck in an extreme extension of some of the City of Chicago secret slush funds known as TIFs, from a generational 24 years to a nearly two generation long 36 years. And people that this blog would consider 'friends' helped.
With the help of city administrators, Victor Wogen managed to parlay his seat on the DeKalb City Council into income approaching $60,000 of taxpayers’ money in 2008, about ten times more than his annual salary as representative of the Third Ward.
(Reprinted by permission of the author Andy Thayer (email at LGBTliberation@aol.com) - promoted by wegerje)
By Andy Thayer
Anti-Olympics organizers sprinted into the home stretch with a City Hall rally yesterday ahead of Friday's International Olympic Committee vote on which city will get the 2016 games. About 300 attended the protest which - not to take anything away from the talents and hard work of the organizers - should have been considerably larger.
Pre-event publicity for the protest in the major media was uncharacteristically good, with many pro-Olympics media outlets grudgingly reporting "the other side," giving time, date and place of the protest. Moreover, a recent Chicago Tribune poll found that more Chicagoans opposed the bid than supported it - 47 per cent to 45 per cent - and 84 per cent oppose using any public money to support the games.
That these poll numbers couldn't be translated into larger numbers of people on the street yesterday is a reflection of the fact that many religious and community organizations that focus on survival issues that would be directly impacted by these games - food, housing, education, jobs - are apparently intimidated into keeping their opposition silent.
* " District dealing with $475 million deficit" (sub-headline)
* anticipated next year deficit $1 billion
* 500 layoffs so far, more to come
* $130 million needed for pensions this year; $300 million next year
But here's what I remember from the IVI-IPO presentation on TIFs by Ald. Waguespack, Ben Joravsky and the guy from the Cook County Clerk's office.
Each year Chicago property owners pay about $3 billion in property tax revenue. About $550 million is diverted from other taxing bodies (mostly the schools) to TIF districts controlled by the City of Chicago. About 2/3 of the $550 million would go to Chicago Public Schools.
Last year, Chicago Mayor Richard Daley, after bum-rushing the City Council to fill a supposed multi-hundred million dollar gap in the city budget, sold the city parking meters for, potentially, a billion dollars less than their worth. At the time he claimed that there was no other way for us to come up with that money. This year he is threatening lay-offs and/or furlough days for hundreds of city employees because he said there was no other way to close the city's fiscal gap.
At a meeting tonight sponsored by IVI-IPO (Independent Voters of Illinois-Independent Precinct Organization), Cook County Clerk David Orr, Alderman Scott Waguespack and Chicago Reader reporter Ben Joravsky will reveal over 500 million dollars of city tax money hidden away in slush funds around the city, money that could easily close those gaps.
Surprised that you haven't heard anything about this? The answer is you probably have, but haven't understood what Tax Increment Financing Districts (TIFs) are and how they are abused. By David Orr's account last year, there's over 550 million dollars of city tax money sitting in these accounts that are administered in the least transparent way that you can imagine. Tonight's meeting gives you the opportunity to find out about an abuse that costs you and me a fortune, and creates headaches like the parking meter deal, and then ask these three experts what can be done about it.
Date:
Thursday, July 16, 2009
Time:
7:00pm - 8:30pm
Location:
Logan Square Public Library
Street:
3030 W. Fullerton
City/Town:
Chicago, IL
If you are not able to make it, there are people who are expected to be posting from the event. Check IVI-IPO's facebook page for more info. Hope to see you there.
This is STAR as in Sales Tax Anticipated Revenue bonds, and it’s a plan only big developers and pocketed or ill-informed legislators could love. I’ll put links to other articles after the jump so you can further clarify for yourself exactly how STAR financing works, but if you understand Tax Increment Financing (TIF) -- and how TIF is regularly abused in Illinois -- you've already got the concept. Just add the twist of developers capturing, via rebate, sales tax revenues generated within the district.
STAR is beginning to infect catch on across the country. The Illinois intro to it is SB1909, the STAR Bonds Financing Act, which establishes a 900-acre business park in Glen Carbon. SB1909 has passed both houses of the General Assembly. Heaven help us if Governor Quinn signs it. This bill represents the polar opposite of government’s obligations to facilitate a level playing field. What it does facilitate is Illinois’ slide into bankruptcy. According to two state departments, the immediate impact to the state budget will be as follows:
Fiscal Note (Dept. of Revenue) SB 1909, as engrossed, would have a negative impact on State government revenue from the Retailers’ Occupation Tax, Use Tax, Service Occupation Tax, Electricity Excise Tax, Gas Revenue Tax, and Hotel Operators’ Occupation Tax. The combined annual loss to these revenue sources could exceed $15 million annually per established district given the terms of the proposal and depending on the location of the district. Much of this loss will be due to the erosion of the State government tax base that existed before the STAR district was created.
Balanced Budget Note (Office of Management and Budget) SB 1909, as engrossed, would cost the State $15,000,000 in lost sales tax revenue as estimated by the Department of Revenue. SB 1909, if enacted into law would add $15,000,000 in additional spending pressure to the General Revenue Fund and to the current Fiscal Year 2009 budget deficit.
Once this thing starts, it’ll never stop. Guaranteed. It won’t be long before a very large chunk of this state is in a STAR bond district, meaning that state sales tax money will be spent on local projects, meaning that the state’s budget situation will only get worse while the locals try to cannibalize each other. Mark my words.
2-45-155 Tax Increment Financing (TIF) Sunshine Ordinance. The following TlF-related documents for each active TIF district shall be made publicly available on the City of Chicago, Department of Community Development website:
1. The ordinances establishing each TIF district, including all attachments, and any amendments thereto; 2. The ordinances authorizing each TIF redevelopment agreement, including any attachments, any amendments thereto and accompanying Economic Disclosure Statements; 3. Written staff reports presented to the Community Development Commission related to TIF-funded projects; 4. TIF overviews prepared by the Department of Community Development and annual reports prepared pursuant to 651LCS 5111-74.4-5(d); 5. City-issued Certificates of Completion and any required annual employment certifications prepared pursuant to TIF redevelopment agreements.
All such ordinances as described in (1) and (2) above shall be made available on the City of Chicago, Department of Community Development website within seven business days of their passage and publication in the Journal ofthe Proceedings of the City Council of the City of Chicago. All such documents as described in (3), (4) and (5) above shall be made available on the City of Chicago, Department of Community Development website within fourteen business days of their completion in final form.
Da Mare must be thrilled. I think he loves his TIFs more than he loves his Home Rule.
[UPDATE: Per Progress Illinois (http://www.progressillinois.com) Alderman Margaret Laurino, Chair of the Committee on Economic, Capital and Technoloy Development, has signed on as a primary sponsor. This is a good sign for a positive result at Monday's hearing.]
If you don't live in Cook County, skip to the next diary. But if you do, read on for the who why and when on the TIF Sunshine Ordinance, and how you can help stick it to the man by sending an email.
