“Who Paid, Who Gained”: Juan González on How Chicago Funded Real Estate Instead of Social Services | Democracy Now!
“Who Paid, Who Gained”: Juan González on How Chicago Funded Real Estate Instead of Social Services
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- Chicago
- Taxes
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- Juan GonzálezDemocracy Now! co-host.
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A team of researchers led by Democracy Now!’s Juan González at the University of Illinois Chicago recently released an in-depth study on how, through a program called Tax Increment Financing (TIF), Chicago has spent some $16 billion in property taxes it collected over the past 40 years to fund downtown development. The money was supposed to be used to eliminate urban blight. ”TIF funding has actually exacerbated economic inequities throughout the city, pouring more than half of the billions of dollars that it collected into downtown neighborhoods, while 70 other community areas around the city were left to share the other half,” says González.
Transcript
This is a rush transcript. Copy may not be in its final form.
AMYGOODMAN: Now on with the show, Juan. And if you can tell us about your fabulous new report on Chicago?
JUAN GONZÁLEZ: Yes, Amy. Well, first, it’s great to have you back.
And yes, I spent the past year working with a team of researchers at the University of Illinois Chicago’s Great Cities Institute, tracking how the city of Chicago spent more than $16 billion — that’s billion dollars — in property tax revenues over the past 40 years. Ostensibly, the money was supposed to revitalize the city’s physical infrastructure through an economic development tool most people have never heard of. It’s a financing tool known as Tax Increment Financing, that is supposedly a self-financing tool for — that’s been used by hundreds of local governments across the United States. But Chicago is far and away the biggest user of it among all major cities. The program allows a municipality to fight urban blight by designating an area within its boundary, within the city, as a TIF district, and then using all future increased property taxes in that area to pay for infrastructure like roads, parks, sewer systems, provide incentives for private development.
Well, we found that Chicago’s TIF program became a runaway project, with more than 180 different TIF districts created throughout the city. But, in fact, the program was diverting an extraordinary share of taxes that would normally go to basic services and public schools, and instead went into TIF projects. And it drove up property taxes for all property owners in Chicago by an average of 13.7% over the 10-year period that we studied. We found also that 90% of this increased taxes would have occurred anyway without the TIF program. And meanwhile, the TIF districts took in almost as much in property taxes last year as Chicago’s Corporate Fund did to fund the police, fire, health, housing, with the average homeowner paying hundreds of dollars a year, and thousands over the 10-year period, in extra taxes.
We also found that the past four mayoral administrations, TIF funding has actually exacerbated economic inequities throughout the city, pouring more than half of the billions of dollars that it collected into downtown neighborhoods, while 70 other community areas around the city were left to share the other half. And there was very little accountability to the public and clear reporting on how the money was spent.
So, now we’re faced the situation where the school system is — every year doesn’t have enough money to fund itself. The city itself has funding gaps. But yet, the TIF districts are sitting on $3 billion in cash in their accounts, and they’re flush with cash.
So, this is going to become a big issue, because Chicago is about to enter into another mayoral race early next year. We found that Mayor Brandon Johnson has made some positive reforms to the TIF program, but not enough. And the issue of all this TIF money is going to certainly be a subject of debate as we enter the mayoral season in Chicago next year.
AMYGOODMAN: Well, Juan, we’re going to link to your report, the Great Cities Institute in Chicago, at democracynow.org, “Chicago’s Runaway Development Tool.”
Coming up, a new documentary about preserving language, culture, and dubbing The Lion King into Quechua. It’s called Runa Simi. Stay with us.
AMYGOODMAN: “Stars of Fire” by Adrian Villanueva.
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