Recent Comments

Re: “Transparency in Action

ryanwc,

Your kidding right? You really think local governments don't work with the Assessor to analyze how much they can expect to collect from a given property tax rate? They just blindly ask themselves -- we need $X and who cares if rates will have to go up. That's why Daley is a liar (and other politicians responsible for budgets) when he tells voters he's not raising their tax rates this year because times are tough? Or better yet, every year he presents a budget and tells the media, voters, the City Council -- "I'd like to be able to tell you whether or not property tax rates will go up this year but I can't until the Assessor gives me the O.K."

You are being pedantic because you and I both know that's not how the real world works. I do agree with you, however, that rates are somewhat fluid given the assessment process and it would be interesting to talk to the County Assessor and President Stroger and Mayor Daley (and their staffs) how they deal with this fluid process as the prepare and pass budgets every year. But to imagine that they aren't aware of what the assessed value is in the County (even historically) and how that will impact their budget is just silly.

"The rate on your property would be different if the increased assessed value of TIF poperty were included in the overal taxable assessed value for the district."

Perhaps -- but that assumes (as "skeptic" points out) that the various taxing bodies don't just figure out a way to spend even more money that's now available to them.

But that statement could also say the following: "The rate on your property would be different if property values throughout the City never increased [or increased by X%, or decreased by Y%, etc.]"

Or how about "The rate on your property would be different if taxing entities like the Chicago Public Schools were able to cut their budgets through innovative delivery of services or at the very least increase their budgets at the inflation rate plus population growth."

Posted by Arminius8 on 11/30/2009 at 12:53 PM

Re: “Transparency in Action

ryanwc,

I'm sorry, but just like Ben you are ignoring the simple fact that property values are not static (and your analogy is just plain wrong to exclude a property as that is NOT how TIFs work -- keep reading for a lesson). To use your own example, let's imagine a county with four properties each worth $30,000. The government needs $12,000 this year and so sets the tax rate at 10% so it can collect $3,000 from each taxpayer. Now the next year one property becomes a TIF, so its value is frozen for the purposes of tax collection. However, let's imagine that property values increase by 5% across the board so that the remaining three properties are now worth $31,500 each. Let's also imagine that government spending goes up by 3%, so now the government needs to collect a total of $12,360. If the government keeps the 10% tax rate it will now collect $3,150 from three property owners and just $3,000 from the one property owner who is now in the TIF. That gives us a total of $12,450 or more than the government needs! Now obviously, if government spending keeps pace with property value increases, rates will have to go up. But is that a realistic assumption, especially in the go-go late 90s and early oughts?

Posted by Arminius8 on 11/24/2009 at 4:18 PM

Re: “Transparency in Action

skeptic,

You make a couple of good points which I'd like to respond to:

1) You are absolutely right about payroll -- depending on who you talk to it makes up around 75-80% of the entire City budget. You are also right that we need people to provide city services. And you are even right that we need the right combination of $ and benefits to "attract and keep talented staff". Where you and I probably disagree is just how much $ and benefits are in fact needed. Many City workers (union and non-union) have seen wages and benefits (always need to factor in benefits as city employees enjoy benefit packages that are the envy of the average private sector worker) rise much faster than inflation. Combine those wages and benefits with collective bargaining agreements with unions that often have nothing to do with getting a job done efficiently but instead are about protecting members job security and you have the situation that Chicago, Illinois and other states and municipalities have all across the country -- massive budget deficits without delivering quality services. Check out Civic Federation reports for more on the details. Or check out this article about New York's unholy alliance between unions and politicians, which I fear mirrors many of the problems here in Illinois: http://www.city-journal.org/2009/nytom_mad…

2) While I agree with you that it is a combination of rates and property values that determine the total revenue collected, it is obvious that when calculating the rate the taxing bodies have only two variables to consider -- total property values and how much tax revenue they need.

3) The fact that there have been specific examples of corruption tied to privitization is no more dispostive of privitization being corrupt than specific examples of union embezellment being dispositive of unions being naturally corrupt. I favor privitizing services for which a robust competitive market exists (e.g. garbage pick-up -- ask thousands of suburban voters if they have an issue with their one-crew garbage trucks) and obviously giving city workers more flexibility to be promoted and rewarded for good work. But now we are back to goofy unions again -- most collective bargaining agreements reward seniority not performance -- so what is the average workers incentive to work harder than his lazy co-workers?

Finally, I should note that Ben and I do agree about more transparency -- TIF $ should be debated and discussed and expenditures should be easy to track. That's why I support Adam Andrzejewski's campaign for Governor: "Every Dime. Online. In Real Time."

Posted by Arminius8 on 11/24/2009 at 10:29 AM

Re: “Transparency in Action

Also I'd like to see Ben analyze just how much property tax values have increased over the past 20 years (even with the recent real estate crash). In many years we had substantially higher property tax value increases than the inflation rate and/or rate of population growth. When this happens, even when you take certain property off the tax rolls, you can still see property tax revenue increase or remain stable -- without even raising tax rates. Of course, at the same time the Daley Administration has been raising rates and collecting more and more tax revenue (other than the past couple of years, has property tax revenue ever decreased even when there wasn't a rate increase?) When Ben presents these kinds of detailed analyses, then I'll start taking him seriously as a public policy wonk. Until then he is just another liberal hack.

Posted by Arminius8 on 11/23/2009 at 3:14 PM

Re: “Transparency in Action

Anywhere and everywhere Ben makes the misleading claim that TIFs NECESSARILY raise taxes, I will pop up like a bad rash to let everyone know this claim is in fact misleading at best and downright false at worst.

In the latest, Ben says the following:

"As I've explained many times, once a TIF district is created it essentially freezes the amount of tax revenue the schools, parks, county, and other taxing bodies get from it for up to 24 years. Any new revenue is diverted into the TIF fund, which is effectively controlled by the mayor with little oversight or transparency. Tax rates for the schools, parks, county, and other taxing bodies then have to be raised to compensate for the money pulled into the TIF accounts—thus producing a tax hike."

Yes, Ben you've asserted that "tax rates...have to be raised" but haven't explained to readers why this is true. Why not? Because it's not true (or at least not necessarily). As I keep saying, what your claim assumes is that government must necessarily grow faster than property tax increases minus the TIF district property tax at the time of creation (don't forget, the infamous Central Loop TIF and its $100+ million is now back in the general pool of property tax revenue). There is no reason this has to be true and given all the things government does badly, inefficiently, or shouldn't be doing in the first place, I highly doubt it is true. Ben is right that we should question TIFs effectiveness -- now let's have Ben use his reporting skills to relentlessly ask whether or not we are getting a good value for all the money collected by CPS, the Park District, the County, etc. And in doing so let's make sure Ben throws away all his liberal assumptions about how the world works and is willing to ask whether or not we can or should eliminate CPS and give children a voucher instead; whether or not we can privatize more public services, especially those for which a robust market exists already (garbage anyone?); why is it our parks look like crap compared to many nearby suburbs; why is the County in the health-care business in the first place (as opposed to providing a subsidy for the poor to get their care at places like Michael Reese, which might not have had to close if there wasn't a massive publically financed hospital to compete with it), etc., etc.

When Ben starts to question the underlying premise that government must always, year after year grow (especially without population growth) then I might be able to take him seriously as a journalist. Until then, he is simply on a crusade to make the Mayor look bad and to push for more $ on failing government services.

Posted by Arminius8 on 11/23/2009 at 1:39 PM

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