TIF's as a Tax Scam

A Chicago Tribune editorial reports:

When the city sets up a TIF, it caps the property taxes that are paid to other bodies--including schools, parks, the county and the forest preserve--for 23 years. Instead of being shared by all those bodies, the new tax dollars generated by all that growth are controlled by the city. If the city wants to turn an area into a TIF, the others have almost no say in the matter, and no say about how the money is spent.

What they get is a promise of higher property values--and therefore more tax dollars--at the end of the 23 years. (Unless the city decides to renew the TIF for 12 more years, as it is expected to do when the Central Loop TIF, its oldest, expires next year.)

In the meantime, the schools, parks and others get none of that money. If those dollars weren't going back into the TIFs, Chicago Public Schools would have gotten $158.8 million more in 2004; Cook County would have received another $30.3 million. Over the lifetime of Daley's proposed LaSalle Street TIF, the schools would lose at least $1 billion and the county would miss at least $202 million.

The counter-argument is that those dollars wouldn't be generated in the first place if not for the growth stimulated by the TIFs. This is probably close to the truth in areas where a TIF was created to revitalize a blighted area, which was supposed to be the point. But the law is sufficiently squishy as to allow the city, with a straight face, to argue that an area that includes the Sears Tower, City Hall, the Civic Opera House and the Chicago Board of Trade is in danger of economic collapse. Yes, there are buildings with high vacancy rates, and many in need of repair. But it's hard to believe the area will go to seed unless it is rescued by taxpayers.

There really is no such thing as a "fair" tax code.What better proof than this.