Taxpayers in Ravenswood’s six TIFs paid $40.3 million into total property taxes in 2009, excluding SSAs, but 59 cents of every dollar were siphoned away to TIF accounts, records released last week by Cook County Clerk David Orr indicate.
Orr called Tax Increment Financing districts a “broken system.” Orr said TIFs are being used for purposes they were not meant for.
“The city is plugging its budget hole with TIF money but TIFs were not created to be a safety net when the economy went sour,” Orr said in an executive summary released Nov. 23.
Orr called for
- a moratorium to slow the proliferation of TIFs,
- an examination of the TIF funds to distribute surpluses,
- a requirement future TIFs itemize project goals,
- a reform of the budget process to include TIF revenues and expenditures and
- a continuation of TIF transparency efforts.
Orr’s moratorium would last for six months, after the 2011 municipal elections for mayor and alderman. He backed SB 3151, a proposal that would index revenues available in TIF districts to other taxing bodies.
Six Ravenswood TIFs were among the hundreds of Cook County TIFs included in the report. More than $23,818,494 in TIF revenues were collected in the six TIFs, a year over year increase of 12.15 percent and a 16.82 percent annualized increase since 2005.
Orr told Crain’s Greg Hinz Chicago was reassessed last year and that the state multiplier grew, leading to larger tax bills.
The Ravenswood TIFs include nearly all the commercial property in Ravenswood, including the Ravenswood industrial corridor and most of the business districts of North Center and Lincoln Square. That leaves Ravenswood homes to bear the ever increasing burden of city government, schools, public health and public justice systems provided by local governments.
As discussed in earlier articles, three of the Ravenswood TIFs are having revenues ported or declared surplus from their districts, meaning those funds are not available to those TIF districts. Yet, the districts are at risk of urban decay, according to the law which establishes TIFs.
For example, the 1999 study that created the Western Avenue North TIF notes five factors were present “to a major extent” in the area that encompasses much of the Lincoln Square business district:
- Depreciation of physical maintenance
- Structures below minimum code
- Obsolescence and
- Deleterious land use or lay-out
The 1999 study also says the area lacked community planning and had excess vacancy.
The Western Avenue TIF, which spreads along Lawrence from Virginia Avenue to Ashland, Western from Montrose to Foster, Damen from Foster to Leland and Lincoln from Foster to Montrose, has only one TIF project, according to a 2009 report prepared by the city: the 4800 Damen LLC project. The TIF has committed $15,385,283 to the one project of mixed commercial and residential use. The TIF has also committed $2,000,000 to a small business development project.
Key Lincoln Square properties, for example the Davis, were not included in the TIF, records indicate. As the Bulldog noted in an earlier TIF story, the city plans to drain $3.2 million from Western Avenue North in the coming budget.
Original map of the Western Avenue North TIF with land use. Credit: City of Chicago
It is the third year in a row that the TIF has been raided, records indicate. A total of more than $7.6 million has been moved from that TIF in the past three years according to the reports filed by the city.
In total a net of $2.9 million in TIF funds will be removed from the six Ravenswood TIF districts next fiscal year, according to reports filed by the city.