11/07/2022
𝑲𝒏𝒐𝒘 𝑩𝒆𝒇𝒐𝒓𝒆 𝒀𝒐𝒖 𝑽𝒐𝒕𝒆! In an article posted by Tanvi Misra in Bloomberg on Sept. 12, 2018, David Merriman, a Professor at the University of Illinois at Chicago, examined the impacts of TIF. "Merriman concludes that the mechanism, while helpful in some ways, leaves a lot to be desired."
Merriman, further stated later in the article, "Perhaps the biggest concern with TIF, though, is that of transparency, because of the way this mechanism effectively bypasses the public municipal budget process.
“Once a TIF is created, the operation of a TIF receives less scrutiny than other spending,” Merriman said.
"Take Chicago, where a whopping $660 million—a third of the city’s property taxes—go into its many TIF districts. Back in 2009, Chicago Reader’s Ben Javorsky and Mick Dumke called TIF spending a “shadow budget.” They uncovered documents revealing how the administration of then-Mayor Richard M. Daley used TIF money to revamp skyscrapers and dole out subsidies to large corporations in deals made behind closed doors. Not a lot appears to have changed since then: In 2017, an investigation by Crain’s Chicago Business and the Better Government Association found that under Mayor Rahm Emanuel, $55 million in TIF dollars—ostensibly meant for fighting blight—were spent to renovate Navy Pier, a glitzy waterfront tourist attraction, But TIF is good for sparking public-private partnerships that may help fund useful infrastructure that may not otherwise be appealing to investors, such as raising the height of a bridge tunnel so it can carry large trucks, for example. In the report, Merriman recommends several ways to use this tool more effectively, and make it easier for policymakers and researchers to evaluate. Most important: Cities need to be more transparent about how they are using TIF. It’s not a magic free-money generator."
“It’s a concern about why those decisions are being made,” he said, “and why there’s a public subsidy for development that might have occurred even without the subsidy.”
Source:
https://www.bloomberg.com/news/articles/2018-09-12/does-tax-increment-financing-really-work-usually-no
𝗩𝗢𝗧𝗘 𝗡𝗢 𝗢𝗡 𝗣𝗥𝗢𝗣𝗦𝗜𝗧𝗜𝗢𝗡 𝟮 𝗧𝗢𝗠𝗢𝗥𝗥𝗢𝗪!
Cities love to use Tax Increment Financing to boost development. Should they?