MEMORANDUM

TO:

The Honorable Members of the City Council

FROM:

Alexandra D. Holt
Budget Director
Office of Budget and Management

DATE:

February 9, 2016

RE:

Cancelling Current and Proposed Tax Increment Financing Projects

As you know, each year the City adopts an annual surplus of available cash from Chicagos various Tax Increment
Financing (TIF) Districts. In fact, since 2011, the City has surplused almost $700 million, with CPS receiving nearly $350
million of such surplus. We continued this practice with the 2016 budget, adopting a $113 million in surplus including
surplus from the downtown TIF freeze - of which nearly $60 million is paid to CPS.
The annual surplus is balanced against the need to continue making investments in our neighborhoods, including schools,
parks, CTA stations, lighting, and local economic development. TIF funding is one of the Citys effective tools to promote
and leverage neighborhood economic development and affordable housing, to support job training and workforce
development, and to invest in needed public improvements such as schools, parks and other neighborhood
infrastructure.
In light of the serious financial challenges faced by CPS, many aldermen have proposed an additional TIF surplus for CPS.
To that end, I would be happy to meet with you in the coming weeks to discuss current and proposed TIF funded
projects in your ward that could possibly be cancelled and the associated TIF surplus can be provided primarily for the
benefit of CPS.
Additionally, as the Mayor did with the downtown TIF districts, if you would like to freeze spending in or terminate any
TIF districts in your ward, OBM and DPD would be happy to work with you. Freezing TIFs provides additional annual
surplus and terminating a TIF returns property tax value to CPS on an ongoing basis.
Please note the City does not have the authority to direct all surplus TIF funds to CPS. Each taxing district will receive its
proportionate share. CPS share is approximately 50 percent. However, the Mayor has committed to returning the
Citys 20 percent share of any additional surplus identified through this process to CPS, bringing CPS total share to
over 70 percent.
Please feel free to contact me with any questions or concerns.
CC:

Forrest Claypool, Chief Executive Officer, Chicago Public Schools

David Reifman, Commissioner, Department of Planning and Development