How does a TIF Increase my taxes?

Welcome to the deep end of the pool.

Let’s start with the idea that Chicago has two areas. One has TIF districts and is generating about one third of the tax revenues. The other two-thirds of the revenue comes from the remainder of the city.

This is in fact about what is happening. About a third of the city has TIFs and they generate about a third of the property taxes. The other two-thirds of the city generates the other two-thirds of property taxes.

The other assumption is that we only have three budgets: Schools, city and county government. In our example each is spending $300 million a year. It is five years till the TIFs start. The other assumption we’ll use is that the three governments are able to limit service increases to five percent of the budget each year.

So that in year -4 the budgets for each of the governments is now $315 million. ($300 + 5%). The future TIF contributes $100 million in tax revenues in year -5. The other two-thirds of the city contribute $200 million in year -5.

When the TIF starts, the revenues from that district are frozen for each of the three governments. The increase in property tax revenue over the base established in year zero is paid to the TIFs instead of to the taxing bodies. Taxes increase within the TIF district at the same rate as they do outside the district. And because there is a five percent growth in expenditures each year, the taxes are growing by at least that much.

At year 24 the TIF expires and all the tax revenues again return to the three tax districts.

The first chart is based on an illustration by Rachel Weber of UIC, showing how the tax revenues for the TIF increase, but the revenues within the TIF do not grow for the taxing bodies. It is a simple chart based on a five percent annual increase in taxes in all parts of the community.

TIF Revenues grow while tax revenues for taxing bodies are capped during the TIF within the TIF district

TIF Revenues grow while tax revenues for taxing bodies are capped during the TIF within the TIF district

So far, so good? Okay, but what is happening to the other two-thirds of the city? That part of the city has to meet the continued demands of the taxing districts for a five percent annual increase for all parts of the city. In other words, they are covering the tax increases needed for the TIF districts and for themselves.

To put it another way, let’s look at what happened to our TIF that now is 16-years old. Under our assumption, the TIF is generating $127.63 million for each of the city, the school and the county.

When the TIF was started that amounted to one-third of the tax revenues for each taxing body. However, their needs have grown in 16 years and they now require $835.8 million to operate. The two-thirds of the city without the TIF should be paying 2/3’s of the tax, or about $557.2 million.

However, the TIF is forcing the increases on the two-thirds without a TIF. They have to pay $708.17 million an additional $ 150.97 million in taxes.

TIF causes greater tax increases for everyone due to the loss of TIF district marginal tax increases

The blue line represents taxes with a TIF, the red line taxes in the same municipality without a TIF.

The taxpayers in the TIF of course are matching the increases in taxes outside the TIF. Their only benefit is their supposed control over the TIF funds and their proximity to the improvements in the TIF district.

The TIF itself, which had been benefiting from a five percent increase in taxes each year is doing very well, because taxes are increasing at more than five percent due to the need of the local governments to balance their books.

Taxing district tax revenues outside a TIF district drop, representing the need for lower tax rates once a TIF is closed

The total tax revenue for citizens outside the district rises greater than the taxing district's expenditure growth. Once the TIF is closed, tax rates should show a marked decrease.

More: Alan Wyman convicted of 2006 sexual assault…

According to the Chicago Breaking News summary of the court proceedings, the victim told the jury she was held by Wyman for four days in September 2006. She told the jury she was bound and gagged by Wyman, only being fed water and two spoonfuls of sugar.

She testified that a friend of Wyman, Joseph Swain, 56, entered the apartment during her captivity, discovering the woman tied to a bed. Swain testified he was asked in a “frantic” voice to call police by the woman. Swain testified he “freaked out,” going home and never called police.

However, the victim was able to use Swain’s intrusion in any case, persuading Wyman that Swain was calling the police. Wyman, she said, got panic-stricken. Wyman drove her to the home of a family friend. She said as he left he asked if he could call her.

Conklin told the Bulldog Wyman built a special closet which Conklin described as a closet within a closet. The space was meant to restrain victims and reduce their noise. News reports from the time of the crime indicate the victim was held in this closet and lost track of time during her kidnapping.

Wyman was known in the neighborhood as a handy man. His designed a rock garden which still stands outside Lee’s Grocery, at the corner of Pensacola where it meets Western Ave. The news of his arrest in 2006 shook the Welles Park neighborhood.

The 2006 arrest was picked up by both the Chicago Sun-Times and the Chicago Tribune. Sun-Times coverage of the arrest earned it a separate media column in the Chicago Reader.

Community activist Julie Peterson told Michael Miner at the time, “When I showed the article to my neighbors they were floored— this man had been in their homes as a handyman… Everybody knew who he was.”

Activists including Peterson and administrative law judge Ann Breen-Greco, protested against what they called spectacular coverage by the Chicago Sun-Times.

In a May 2010 letter on her web site,, Peterson calls on neighbors to support the victim:

“The woman who was kidnapped and held in the apartment at Cullom and Western a few years ago by Alex Wyman. He held her for days and did horrible things to her…

This is our job. To stop him. To support (the victim). To do our best…

This man was in our homes. We cannot distance ourselves. We need to make sure they don’t say “it’s her word against his” and let him go free. Like so many rapists and violent criminals before…”

Sentencing of Wyman will be held July 2 in the court room of Judge Porter, at the criminal courts, 26th and California Ave. Chicago Police have not yet responded to requests for more information.