More Rationale for why Chicago Cannot Afford the Olympics

By: T.R. Slyder, TRSlyder@yahoo.com, AndyDisco on Twitter



I got a tweet from the Chicago Reader today linking to this article. It basically says that the city of Chicago is broke, Mayor Daley's approval rating is 35%. That article also links to this article, which has an attention-grabbing first paragraph to illustrate how broke the city is:

Earlier this month, Chicago Mayor Richard Daley released the latest round of alarming budget numbers, this time projecting a $300 million shortfall over the coming year. The deficit led City Hall to send out 1,500 pink slips to Chicago city workers, cuts which the Chicago Federation of Labor is still working to avert. In response to the news, Crain’s columnist Greg Hinz noted that the layoffs — if finalized — would only fill “about 10% of [the] hole in the city budget.” He went on to ask: “So, where’s the city going to get that kind of cash?”

That article is very informative, but the required reading for that article, which is also linked in that Chicago Reader article by Ben Joravsky, can be found here. It explains how the Tax Increment Financing (TIF) works. It's a rather shadowy and relatively unknown tax policy of Mayor Daley's, but is arguably his most insidious. I copied the most basic, short answer of what they are and pasted it below.

OK, one more time—let's review how this sucker works. When the City Council approves a TIF—always with Mayor Daley's blessing—it freezes the amount of property tax dollars the schools, the parks, the county, and other taxing bodies get from that district for 23 years. If the schools were getting $100 from a TIF district when it was created, that's roughly all they'll get until the TIF expires. Any extra tax money, generated by rising assessments or new development, goes into the TIF fund, which Mayor Daley is free to use largely as he wants.

Think about this. If the schools, parks, and county can only get $100 from a TIF district, what do they do when their expenses go up to $200? They have to raise their levies—the amounts they each get from the property tax pie—to compensate for the money diverted to the TIFs. When they do that, property taxes go up. No matter what the city tells you, TIFs are tax hikes, plain and simple—the more you create, the higher taxes go.

It might not be so bad if we only had three or four TIFs. But there are 156—and the city is proposing new ones every month. The existing TIFs divert at least $400 million a year in property taxes. At their current rate of growth, in a few years they'll be diverting more than $500 million a year.

You may be reading all of this and thinking, "Ok, is it really evil that your mayor has your tax dollars at his disposal?" The surprising answer is "yes". As mentioned above, Mayor Daley gets to do whatever he wants with this revenue. These are what finances a lot of his grandiose, heavily-reported-on expenditures. So while government employees are furloughed, and teachers are laid off, TIF funds paid for the new park on the South Side where Mayor Daley is seen cutting the ribbon, proclaiming his championdom of the impoverished, and kissing the babies.

So when he is the guy saying, "Look, just give Chicago the Olympics, and I'll find a responsible way to pay for it, that places minimal burden on the taxpayers. Would I lie to you?", it's difficult to believe.







That's how I roll.