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Wednesday, September 16, 2009

TIFs: The budget surplus that dares not speak its acronym

Posted By on 09.16.09 at 12:53 PM

This weekend Dan Mihalopoulos wrote a long political analysis of a Tribune poll that found Mayor Daley's approval ratings at an all-time low of 35%. It's a very good piece, and worth reading, save for this (emphasis mine):

"The bad economy has left Daley unable to fulfill his 2007 promise of generous wage increases to unionized employees for the next 10 years. Instead, Chicago has been forced to take many of the same cost-cutting measures as other cities and private companies, including layoffs and furloughs.

"'The mayor's biggest problem is financial,' added Vallas, who now runs the public schools in New Orleans. 'The well has run dry.'"

[Update: Okay, this too: "the Games represent what could be his best chance of overcoming the financial troubles that have made his job increasingly difficult." Since he's openly admitted he has no other ideas, I guess this is true as far as it goes.]

Yes, his biggest problem is financial. But it's not just the bad economy that's forcing layoffs and furloughs. It's also three little letters.

As the Reader and Progress Illinois* have pointed out frequently, at great length, and at no small risk to our sanity, tax-increment financing has allowed Mayor Daley to simultaneously run a budget deficit and a budget surplus.

It's a miracle akin to turning water into wine, which is great if you have enough water. Plus: TIFs, when used badly, are an inequality machine, causing tax revenues to pool in areas with high assessments.

Now go back and read that first sentence of the quote. That's the reporter saying it's the bad economy's fault. Not Daley, not Paul Vallas. The devil's in details like those.

Not all TIFs are bad, not even ones that aren't in "blighted" areas, as even Ben Joravsky has pointed out. They're a tool: they can be used well, and they can also be destructive.

The Reader's written a lot about parking meters, and a lot about the Olympics. Other local media outlets haven't shied away, and you can see the results in the Trib poll. But the city's use and abuse of tax-increment financing doesn't seem to have broken through to the public consciousness, or even that of the press.

* Seriously, this is a fascinating analysis, read it if you haven't already.

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