A mayoral task force on tax-increment financing reform in Chicago has recommended greater oversight of private subsidies in TIF districts and the development of a multi-year economic development plan to better judge the value of projects.
The recommendations come from Mayor Rahm Emanuel’s task force, which released a 100-page report last week. TIF was a favored economic tool of Emanuel’s predecessor Richard Daley but some critics charged they were overused in areas that didn’t meet traditional “blighted” criteria resulting in the diversion of tax dollars from public schools and other taxing bodies. Daley freed up $180 million in surplus TIF revenues last year to help balance the budgets of the city and Chicago Public Schools.
The group recommended creation of an economic development plan to guide development of TIF districts and projects, and better coordination with the city’s capital budget planning process. The city should establish strict performance metrics to judge projects and take action against developers that do not meet them, according to the task force, which also recommended the creation of a TIF oversight board.
“The recommendations of the committee reflect three months of careful consideration of this very complicated and important financing tool,” said Carole Brown, a public finance banker at Barclays Capital who served as chair of the task force.
Emanuel said he would work to implement the reforms immediately. He said the proposed changes will increase efficiency, transparency and establish accountability.
“I believe TIF is an essential tool to help create jobs and economic growth for the city and its residents, and we must ensure taxpayer dollars are spent wisely and on projects that contribute to our long-term economic development goals and job creation,” Emanuel said.
Adela Cepeda, president of A.C. Advisory Inc., Steve Koch, vice chairman at Credit Suisse, and Laurence Msall, president of the Civic Federation of Chicago, were also among members of the task force. Chicago has 163 TIF districts that generate roughly $500 million in incremental tax revenue annually.