David Orr, TIFs, and "...a few lonely academics, community activists, and reporters."
Ben Joravsky on how solutions become the problem: The True TIF Tally Cook County clerk David Orr reveals—nay, publicizes—that TIFs sucked up more than $500 million in property taxes last year.
“The total amount Cook County taxpayers are paying in TIF revenue now exceeds $800 million,” Orr writes in his report. “If TIFs were their own separate taxing agency, they would collect the second largest amount of revenue in Cook County. The Chicago Public Schools rank first with $1.7 billion.”Isn't this welfare for Capitalists?
What led Orr to break the news so boldly this time around? “I’m open to TIFs as a tool, but I believe there are significant abuses,” he says. “I believe we have reached a point in the process where the public needs much more information about how this program is operating.”
6 comments:
The question that needs to be asked is, Would the development have been built without the incentive of the Tax Increment Financing, TIF district being established? Potentially the answer could be all development will be done eventually. That is the extreme position. In places that are economically depressed a TIF works to revitalize the area. In areas that the assessed value may actually be declining a TIF will freeze the values. The theory holds that as development in the TIF brings jobs to the area the TIF will spur more development. Economic theory is simple, commerce will follow the money or where the wages are being paid.
TIF’s are a problem where commerce will come no matter what. We see this is areas where say a shopping center is going to be built. The developer has narrowed the potential sites down to three different communities. At this point the bidding war begins. Which community can give the most incentives to land this sales tax producing cow? The city or municipality has very little downside because they are going to reap millions in sales taxes. The rest of the taxing bodies must then wait 23 to 35 years for the TIF to expire to see any direct benefits. In this example we must go back to the question, Would the development have occurred anyway?
Bill, regarding your question, "Isn't this welfare for Capitalists?" The answer is, "Yes, as long as they are cronies of Mayor Daley."
How much more of this legalized plunder of our city must we endure before the petty tyrant on the fifth floor of City Hall is finally brought to justice? When will Patrick Fitzgerald finally get around to sending Daley away for good?
Gee I wonder if a tax increase would be neccasary if the TIFS werent sucking up all this money? The answer is NO our taxes go up to give Daley a huge slush fund for friends and family.
There is a difference between a capitalist and someone seeking special favors from politicians.
TIFs are welfare for special pleaders. The fact that some of these pleaders have a side business in capitalistic enterprise is a coincidence.
JBP
I disagree with characterizing people who parlay their insider connections for lucrative deals as being capitalists.
Many of these people couldn't build a competetive product in a free and fare market place.
Cronyism isn't really a legit part of the free market.
I disagree with characterizing people who parlay their insider connections for lucrative deals as being capitalists.
They're Capitalists Carl...but the unions are in this up to their necks too...
What's Socialist about it is the notion government can make decent Capital Investment decisions. It can't because its so prone to cronyism....
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