Creation vs.

Capture: Evaluating the True Costs of Tax Increment Financing

Sherri Farris Senior Research Analyst Cook County Assessor’s Office November 2008

Executive Summary Tax Increment Financing (TIF) is a tool for promoting economic development, available to individual municipalities but requiring the approval of state legislatures and adherence to state determined standards. The use of this tool has provoked controversy because it impacts the property tax base that local governments and schools rely on for funding, as well as tax rates and thus property tax bills. This report focuses on understanding TIF in Cook County, and particularly Chicago. The use of TIF in the City of Chicago has increased dramatically over the last two decades and both a substantial portion of the property tax base and the land area of the City are now contained within TIF districts. Combined revenues to TIF districts total more than spending on some categories in the City’s official budget. Despite the extensive use of TIFs there is little empirical evidence of the effectiveness of TIFs in promoting economic growth, while there is some indication that they benefit disproportionately from already occurring growth. Understanding how TIF works is important because it has an impact on tax bills for individual taxpayers, not just those within a TIF district, but all taxpayers in the City and Cook County. Because TIF keeps a portion of the property value out of the general tax base, tax rates calculated using the remaining base are higher then they would be otherwise. This is true to the extent that some or all of the property value growth in TIF districts would have happened without the TIF activity. It is reasonable to assume that at least some growth would have happened if no TIFs had been created, which means that tax rates and therefore taxes are higher than they would have been without TIF. The effect of TIF on the tax dollars that each taxing agency collects is of less significance than the effect on taxpayers. Each agency submits a levy request for property taxes, which is divided by the available tax base to arrive at the tax rate necessary to provide that amount in tax revenues. The levy does not change if the base is lower because of TIF. This does not mean that TIF cannot have an indirect effect on the ability of taxing agencies to increase their levies – any pressure on the property tax in the form of higher taxes contributes to the difficulty of increasing the tax. As of the Cook County Clerk’s 2006 report there were 378 TIF districts in the County, 140 of which are in the City of Chicago.1 TIF districts now comprise approximately 26% of the City’s land area and almost a quarter of the total value of commercial properties is in TIF districts and therefore not included in the general tax base. Taxes to TIF districts in 2005 totaled $386.5 million and in 2006 this increased by almost 30% to $500.4 million. This is more than the City budgets for the Department of Streets and Sanitation, yet the amount does not appear in the budget or any easily accessible public documents. The earliest Chicago TIF district, the Central Loop, was authorized in 1984. It is scheduled to expire at the end of 2008, which would return $2 billion in Equalized Assessed Value (EAV) to

This is the latest full report of equalized assessed values available, from www.cookctyclerk.com/sub/TIF.asp. As of the 2007 Annual Reports submitted by the City to the State Comptroller there were 157 districts in Chicago.

1

1

the tax base.2 The LaSalle Central TIF was authorized in 2005, removing $153 million in EAV from the tax base in just the first year. The LaSalle TIF collected $9.6 million dollars in 2006 – before any redevelopment activity has even begun. It is true that TIF can stimulate growth and to the extent that TIF districts increase property values, they provide a long-term benefit to the City and taxpayers. And while taxes are only higher due to value growth that occurs within TIFs but is not caused by TIF redevelopment, it is also clear that there can be substantial property value increases erroneously attributed to TIF. More districts should not be created without first gaining a better understanding of the effectiveness of TIF and making TIF fund expenditures more transparent. The purpose of this paper is to illustrate both the difficulties in determining the effectiveness of TIF and the importance of considering its costs and benefits as an economic development tool. After a brief introduction to TIF generally in all states and to the specifics of its application in Illinois, the paper goes on to discuss the mechanics of TIF operation in Cook County and Chicago, and how it interacts with the property tax system. We then offer a review of TIF districts in Chicago, including TIF revenues, expenditures and redevelopment activities. The burden as well as the administration of the property tax has recently been the subject of much scrutiny, particularly during the rapid rise in residential property values and the current market slowdown. In spite of this intense public scrutiny the effect of TIF on tax burdens receives relatively little attention. The goal of this paper is to focus attention on this important part of the property tax system and to emphasize its effect on taxpayers, to make clear the necessity of measuring the effectiveness and cost of TIF.

Until September of 2008 it was unclear whether or not this TIF will be renewed, but the City of Chicago Department of Planning and Development has announced that they will allow it to expire as scheduled (Crain’s Chicago Business, “Daley letting huge Loop TIF die”, Greg Hinz Sept. 24, 2008).

2

2

Tax Increment Financing Basics TIF was first used in California in 1952 and while as late as 1970 only a few other states were using it, by 2004 all fifty states had passed legislation authorizing the use of TIF. Illinois adopted TIF in 1977 and instated a reform to the legislation in 1999. The specifics vary by state but the general idea is the same: a geographic area is specified at the creation of the TIF, the taxable property for the area is frozen, and any revenues from incremental growth in property value goes into a fund used to finance improvements in the district. Usually, the incremental growth is a result of redevelopment paid for by debt incurred in expectation of the increased revenues. The incremental revenues are then used to repay the debt. Most states have time limits on the life of TIF districts and restrict their use to blighted or distressed areas. The stated purpose of TIF in Illinois is to promote economic revitalization by underwriting development in blighted areas in order to increase property values and make further development more attractive.3 Each TIF district is authorized for 23 years, based on a broad set of standards for what constitutes an eligible area. The taxable property value (Equalized Assessed Value or EAV) at authorization is frozen, and remains the tax base for all other taxing bodies. Tax revenues from subsequent growth in EAV are collected and deposited in a fund for the TIF district.4 These funds are then available to either directly fund TIF development activities, or to make payments on debt incurred to finance development. Illinois statutes governing TIF districts require a process of public notice, public meetings or hearings, and agreement from affected taxing bodies for a municipality to create a new TIF. A representative from each affected taxing body sits on a Joint Review Board that approves TIF district creation. Once a municipality has completed this process, they must pass an ordinance creating the new district. Each TIF district has a redevelopment plan that specifies the projects that will be undertaken, and an annual report for each district must be submitted to the State Comptroller. At the 23-year expiration date of a TIF in Illinois the municipality has to enact an ordinance dissolving the district. At that point, the county clerk eliminates the frozen value and returns the values to full, and any excess money the district may have is returned to the treasurer for redistribution to the appropriate taxing bodies. Municipalities can also enact an amended ordinance to extend a district up to 35 years (total). To renew a TIF district, a municipality has to follow a proscribed process of public notice and agreement from the affected taxing bodies, just as they do to create one. For states and their individual municipalities, TIF is essentially a tool to leverage financing, and a classic TIF district operates by borrowing against the expected future growth and using the borrowed funds for development within the district. This new development creates and promotes growth in property values and the revenues from that growth are used to repay the original debt. The premise is that any new development funded through TIF would not have occurred without
Tax Increment Allocation Redevelopment Act (1977), 65 ILCS 5/11-74.4ff.; 1999 reform, P.A. 93-747. In 1985 expanded TIF to include sales and utility taxes, and then use of these taxes was subsequently limited to districts created prior to 1987; only a couple of districts in Chicago accessed sales taxes in addition to property taxes and sales taxes are no longer be collected by City TIFs (Roland Calia, “Assessing the Impact of Tax Increment Financing in Northeastern Illinois: Empirical Analysis and Case Studies”, Civic Federation, 1997, p. 5).
4 3

3

the TIF – usually referred to as ‘but for’, as in ‘but for the TIF the development would not have happened’. It is allowable for TIFs to instead operate on a ‘pay as you go’ basis, using revenues for development as they come in without incurring debt. In this case, however, TIF is simply a means to reallocate a portion of the general property tax base to TIF projects, even though increase in the property tax base would have occurred without the TIF.

TIF Terms Levy: Equalized assessed Value (EAV): Frozen EAV: Increment EAV: amount of money a taxing body can collect from the property tax base in a given tax year property value for the purpose of calculating property taxes; each property has an EAV and the total EAV for all properties is used to calculate the tax rate the property value that taxing bodies other than a TIF district can collect taxes on; this EAV amount is included in the total EAV to calculate the tax rate the property value that the TIF district can collect taxes on—this is the new EAV since the TIF was created (either increased value caused by TIF activity, or growth that would have occurred anyway, or some combination) this is calculated by dividing the levy by the EAV (with increment EAV excluded); a rate is calculated for each taxing body, with their specific levy requests and the EAV available to them; the city composite rate is all of those rates combined

Tax rate:

4

Tax Rates and Taxes In order to understand the role of TIF in property taxes in the City of Chicago and Cook County, it is first necessary to understand how the property tax system as a whole operates in Illinois, particularly how tax rates and taxes are calculated. During a given tax year, the Assessor’s Office determines the Assessed Value for all properties – this is a percentage of the full market value of a property, as of January 1st of the tax year. In Cook County this percentage varies by type of property, while for the rest of the state it is 33.33% of market value.5 In an attempt to ensure that assessment levels are uniform across the state, the Department of Revenue calculates a state multiplier. This is applied to assessed values to produce an overall ratio of 33.33% of assessed value to full market value in Cook County. After the multiplier is applied to the assessed value, any exemptions (such as exemptions for homeowners and seniors) are deducted to arrive at an Equalized Assessed Value (EAV) — taxable value— for every property. To calculate tax rates and individual tax bills, taxing bodies first submit their levy requests to the County Clerk, subject to growth limitations. The levy is simply the amount of revenue taxing bodies need from property taxes to meet their budget requirements, and many taxing bodies are limited to increasing their property tax revenues by the rate of inflation or 5%, whichever is less.6 Then the clerk calculates tax rates for each of the taxing bodies, computes a composite rate, and applies that rate to the EAV of individual properties to produce tax amounts for each property. Each taxing agency – school, city, village, library, park district, etc. – has a levy and an available EAV, from which a tax rate is computed by the Clerk. The tax rate is calculated by dividing the levy by the total taxable property value (EAV). Rates for all of the agencies in an area are combined to make the composite rate that is applied to individual properties.
Taxes Requested (Levy) ________________________ Taxable Property Value (EAV)

= Tax Rate

For example, if the school rate is 3%, the city’s 2% and the park district’s 1%, the composite rate is 6%: 3% + 2% + 1%. Taxes for individual properties are a product of the composite tax rate and the taxable property value of the property.
Property EAV Composite Tax Rate Tax Bill = 45,000 = 6% = 45,000 * 6% = $2,700

In Cook County, different types of property are assessed at different percentages of market value. For tax year 2008 those percentages are: residential 16%, apartment 22%, non-profit 30%, commercial 38%, industrial 36%, and vacant land 22%. In addition, certain incentive programs lower the percentage that would otherwise be assessed. 6 In Illinois many jurisdictions’ levies are limited through the Property Tax Extension Limitation Law (PTELL), 35 ILCS 200/18-185 to 18-429.

5

5

When a TIF is created, the increase in EAV within the TIF is no longer part of the EAV for other taxing bodies – it is not included in calculating tax rates, and the taxing bodies receive no revenue from that EAV. The rate is calculated without the TIF EAV and then that rate is applied to the whole EAV, so that the TIF EAV generates tax dollars for the TIF district.

Tax rate applied and taxes go to TIF district Full EAV Returned to general tax base

New EAV Used to calculate tax rate

Frozen EAV

Tax rate applied and taxes go to schools, city, etc

A common misconception is that the property tax dollars are frozen, when in fact it is the EAV that is frozen – the value of the property with the TIF for tax purposes – not tax dollars. Any growth in the property values within a TIF is taxed at the regular tax rate, and the tax dollars go into that district’s funds. Taxes from the frozen amount of EAV go to the other taxing bodies. Growth and Revenues One of the most prevalent misconceptions regarding the mechanics and effects of TIF (and one of the most frequently mentioned in newspaper articles) is that the tax dollars collected by TIF districts is a pot of money that would otherwise have gone to schools, parks, libraries, etc. The property taxes collected by TIF districts each year would not go to these other taxing bodies, either because they are subject to the limit on per-year increases (or they voluntarily subject themselves to that limit) or because they are able to levy for as much as they want.7 The Chicago Public Schools have increased their property tax amount by the allowable inflationary increase for the past several years—they have collected what they are allowed to collect, TIFs or no TIFs.8 Neither the City of Chicago nor Cook County increased their total property tax amount for the past few years – they collected exactly the same amount of money from the property tax base.9 If TIFs cause all growth in value for previously existing properties within their bounds, there is no cost to taxing agencies and no effect on tax bills. If TIF redevelopment activities cause only some growth in existing properties, there is no cost to taxing agencies but tax bills are higher than they would have been without TIF. To the extent that TIF districts do not cause all growth in new properties within them, taxing agencies lose revenue over the course of the life of each
The City of Chicago voluntarily limits its levy increases in compliance with PTELL. In 2007, CPS voluntarily kept their levy to an increase only slightly more than what they received from new property, and did not increase it to the maximum allowed under PTELL. 9 The Mayor has announced an increase of $80 million in the City’s levy for 2008.
8 7

6

TIF district. This is mitigated to some degree when the additional EAV is returned to the base as new property when a TIF is dissolved. The following examples illustrate how this works, with a simplified example levy and EAV to start with. Then examples of changes for the following year with TIF and without TIF are given, under different assumptions of the effect of TIF on property value growth. Below are the figures and calculations for the starting point.
Year One – Before Hypothetical TIF Levy = 50,000 EAV = 500,000 Rate = 50,000/500,000 = .10 or 10%

TIF District Created and Causes All Growth within District If all new growth in property value within a TIF district is attributable to TIF, then taxing bodies do not lose any revenues and taxpayers do not have higher tax bills than they otherwise would have. In this case, TIF operates perfectly – creating growth when on growth would have occurred – and at the end of the life of the TIF taxing bodies and taxpayers benefit from the expanded tax base. In the year following the example starting point a TIF is created, covering part of the hypothetical taxing area. The levy increases over the previous year, and we assume property value is higher because of TIF. Within the TIF district property values grow because of the TIF, and some growth also occurs outside of the TIF. The total EAV grows by 100,000 over the previous year – 30,000 within the TIF and 70,000 in the rest of the area.
Year Two – TIF Levy = 52,000 Total EAV = 600,000 EAV growth in TIF = 30,000 Other EAV growth = 70,000 Available EAV = 570,000 Rate = 52,000/570,000 = .09123 or 9.123%

In this case, the taxing agency receives its levy, and the TIF district receives tax revenues from the EAV growth within it. Taxes to Agency = 570,000 * 9.123% = $52,001 Taxes to TIF district = 30,000 * 9.123% = $2,737 Taxes for property with EAV of 25,000 = $2,281 No TIF District – No Growth vs. Growth in TIF Area If no TIF is created in the following year and we assume that without TIF there is no growth in property values in the area that would have been a TIF, the available EAV and tax rate are the

7

same as if the TIF had been created. The levy still increases by the same amount over the previous year and the same amount of growth occurs in the rest of the area – 70,000 in additional EAV.
Year Two – No TIF Levy = 52,000 Total EAV = 570,000 No EAV growth from TIF Other EAV growth = 70,000 Available EAV = 570,000 Rate = 52,000/570,000 = .09123 or 9.123%

In this case, the taxing body still receives the same amount of tax dollars, and taxpayers have the same tax rate applied to their property values, and thus the same tax bills. Taxes to Agency = 570,000 * 9.123% = $52,001 Taxes for property with EAV of 25,000 = $2,281 However, if we assume that some growth would have occurred in the TIF area even without TIF, taxpayers have higher tax bills because of the TIF. In the following year we now assume that without TIF, some growth in property value still occurs in the area that would have become a TIF district – 20,000 in EAV – and the same growth occurs in the rest of the area – 70,000 in EAV, and the levy increases by the same amount.
Year Two – No TIF - Growth Levy = 52,000 Total EAV = 590,000 No EAV growth from TIF TIF area growth = 20,000 Other EAV growth = 70,000 Available EAV = 590,000 Rate = 52,000/590,000 = .08814 or 8.814%

In this case the taxing body receives the same amount of tax dollars but taxpayers have a lower tax rate applied to their property values than they would have had – both with TIF, and without TIF if TIF caused all growth in the TIF area. The rate is lower because some of the growth in the TIF area occurred without TIF, and the higher EAV is available for calculating the tax rate. Taxes to Agency = 590,000 * 8.814% = $52,002 Taxes for property with EAV of 25,000 = $2,204 The difference between these two rates – 9.123% if TIF caused all growth and 8.814% if some growth would have occurred without TIF – is the cost to taxpayers of growth not caused by TIF but allocated to TIF.

8

Taxes for Property with EAV of 25,000
With TIF $2,281 No TIF – all growth caused by TIF $2,281 No TIF – some but not all growth caused by TIF $2,204

Under the assumption that not all growth within the TIF area is attributable to the TIF, tax bills would be lower without TIF than with it. In this example, taxes are 3.5% higher because of growth not caused by TIF activity but captured within the TIF district. We can carry the hypothetical example out an additional 22 years, encompassing the whole life of a typical district.
End of 23 Year Life of TIF Levy = 90,000 Total EAV = 2,010,000 EAV growth in TIF = 210,000 Other EAV growth = 1,800,000 Available EAV = 1,800,000 Rate = 90,000/1,800,000 = .05 or 5%

If all of the EAV growth attributed to the TIF over this time period was not caused by TIF activity – in other words, would have occurred regardless of the existence of the TIF – then the rate would have been 10% lower. Rate = 90,000/2,010,000 = .04478 or 4.478% If half of the growth was not due to TIF the rate would have been 5.5% lower. Rate = 90,000/1,905,000 = .04724 or 4.724% The effect of TIF is therefore on tax rates and taxes, and the magnitude of the effect depends on how much (or how little) growth is caused by TIF activity. Growth in Value of Existing Properties and Growth Due to New Properties Growth in property value can occur in two ways: increase in value on existing properties, and the addition of new properties. The increase in value on existing properties does not result in revenue loss to taxing bodies, because the tax rate is calculated to produce the necessary tax dollars. The analysis thus far was based on assumptions of growth for existing properties. In all of the hypothetical examples, the levy was $52,000 – the taxing district received the same revenues regardless of whether or not a TIF was created and whether or not growth in the TIF area was entirely or only partly because of TIF. Growth due to new properties within a TIF area but not caused by TIF, however, does result in lost revenues to taxing agencies because of the way tax rates are calculated. In the first year that new properties are added, they are not included in the EAV used to calculate the tax rate, but

9

they are included in the EAV the rate is applied to. This means that the rate is applied to a higher property value, resulting in more tax dollars. If the value of new properties is in a TIF, taxing bodies do not get the benefit of that increase in tax dollars over the life of the TIF. When the TIF expires, the total increased property value is added to the base but not the rate calculation (for the first year), so the taxing bodies receive more revenue.

Example: Growth from New Properties—With and Without TIF With TIF Levy: 52,000 EAV: 600,000 EAV growth in TIF, EAV growth in TIF, Other EAV growth, Other EAV growth,

existing properties = new properties = existing properties = new properties =

15,000 15,000 60,000 10,000

Available EAV for agency tax base = 570,000 (total EAV minus 30,000 in TIF) EAV for calculating agency tax rate = 570,000 – 10,000 (new properties not in TIF) Year Two Levy/ (EAV for agency tax rate) = Rate 52,000/560,000 = .09286 or 9.286% Taxes to Agency = EAV for agency tax base * Rate Taxes to Agency = 570,000 * 9.286% = $52,930 Without TIF Levy: 52,000 EAV: 600,000 EAV growth, existing properties = EAV growth, new properties =

75,000 25,000

Available EAV for agency tax base = 600,000 EAV for calculating agency tax rate = 600,000 – 25,000 (new properties) Year Two Levy/ (EAV for agency tax rate) = Rate 52,000/575,000 = .09043 or 9.043% Taxes to Agency = EAV for agency tax base * Rate Taxes to Agency = 600,000 * 9.043% = $54,258

Taxing agencies thus lose revenue from new construction that would have occurred without TIF, as the increased value would have generated taxes without lowering the tax rate.

10

Reporting Requirements As part of the 1999 reform to the Illinois TIF statute, municipalities must submit annual reports for each TIF district to the State Comptroller. These annual reports provide more information on TIF districts than was available prior to 1999 but there are still significant gaps in the information. For instance, municipalities are required to provide a list of any vendors paid more than $5,000, as well as a project-by-project review of public and private investment undertaken (from 11/1/99 to the end of the fiscal year of the report), but these are reported separately, making it impossible to determine which vendors contributed services to which project. In addition, the table of project-by-project public and private investment frequently reports the private investment as “n/a” so that the actual amount of private investment cannot be measured or compared to public investments. Debt service is reported on, but incompletely. If there is any financial activity or cumulative deposits over $100,000 the city is required to provide audited financials and a certified audited report, which are completed by private accounting firms. The municipality must also report any obligations that have been issued by the city and provide an analysis of debt service. In spite of these reporting requirements, it is difficult to determine whether or not a particular district will be able to retire outstanding debt by the expiration date. Each fiscal year report only reports obligations incurred in that year, and the amount set aside for debt service – not the total remaining debt. Finally, because the reporting requirements were not put into place until 1999, there is no data on activities prior to that; this makes it difficult to evaluate the costs, benefits, or effectiveness of districts created prior to 1999. These gaps need to be addressed in order for the costs and benefits of TIF to be considered, both by researchers and the general public. From the standpoint of the public in the City of Chicago, there is an additional barrier – the annual reports are not readily accessible. They are not available online, and must be requested in person from the City’s Department of Planning and Development. This department produces a CD with a PDF file of each individual TIF report, which is available for an indeterminate time once the reports are complete (and reports from previous years are not available). For researchers, there is the added difficulty that the information is not in electronic form, so that any figures have to be gleaned off of each individual report and data entered in order to be used for analysis.

11

City of Chicago TIF Districts As of the 2007 Annual Reports there were 157 TIF districts within the City of Chicago, 17 of which were added in 2006 and 2007. TIF districts now comprise 26% of the City’s land area. The Central Loop TIF district was the first to be authorized in 1984 but the vast majority of districts – 94% – were authorized in 1990 or later. Almost half of all districts were authorized in 2000 or later. At the end of 2007 the total fund balance for all Chicago districts was $1,528,538,201, with $253,294,779 reserved for debt payments. Total revenues collected by TIF districts from 1986 to 2006 total over $2.5 billion. Three quarters of all Chicago TIF districts have no funds reserved for debt service – which means that they are accessing revenues from naturally occurring growth in property values in order to make initial investments in development within TIF districts. However, the fundamental premise of TIF is that growth and investment would not occur but for leveraged development financed through bonds. The debt is then repaid by the increase in revenues caused by TIF related activities. Fiscal year 2007 is the most recent year for which we have complete data on all TIF districts, from the Annual Reports produced for every district. These reports list the fund balance, funds reserved for debt payments, property tax revenues to date, and private and public investment for the period 1999-2007. Of the total 157 districts with Annual Reports for FY2007, 55 districts (35%) have no funds reserved for debt service and report no figures for public investment for FY1999-2007. These districts are shown in the chart below. The total fund balance for these districts is $273,580,342, with total revenues to date of $331,599,681. These revenues arguably represent at least partially captured tax dollars.10
City of Chicago Tax Increment Financing Districts No Funds Reserved for Debt Service No Public Investment FY1999-2007 Date Fund Balance District Authorized Date Expires (2007) 105th \ Vincennes 10/3/2002 12/31/2025 $ 444,912 26th \ Kostner 4/29/1998 4/29/2021 $ 217,506 35th \ Wallace 12/15/1999 12/31/2023 $ 910,156 35th and State 1/14/2004 12/31/2028 $ 1,053,989 43rd and Damen 8/3/1994 8/3/2017 $ 762,311 47th \ Ashland 3/27/2002 12/31/2026 $ 6,181,493 47th \ Halsted 5/29/2002 12/31/2026 $ 5,963,035 47th \ King 3/27/2002 12/31/2026 $ 14,222,283 47th \ State 7/21/2004 12/31/2028 $ 2,287,331 60th and Western 5/9/1996 5/9/2019 $ 2,609,313 69th \ Ashland 11/3/2004 12/31/2028 $ 69,954 73rd and Kedzie 11/17/1993 11/17/2016 $ 506,064 79th \ Southwest Highway 10/3/2001 12/31/2025 $ 2,905,344

Revenues to Date (2006) $ 426,967 $ 227,490 $ 864,327 $ 1,046,044 $ 1,605,086 $ 6,328,645 $ 6,025,083 $ 13,364,894 $ 2,104,549 $ 2,969,311 $ 64,864 $ 562,315 $ 3,737,114

10

These revenues are captured from taxpayers in the form of higher taxes – not captured from other taxing bodies.

12

City of Chicago Tax Increment Financing Districts No Funds Reserved for Debt Service No Public Investment FY1999-2007 Date Date Fund Balance Revenues to District Authorized Expires (2007) Date (2006) 79th Street 7/8/1998 7/8/2021 $ 2,088,148 $ 3,111,538 83rd \ Stewart 3/31/2004 12/31/2028 $ 132,172 $ 72,787 87th \ Cottage Grove 11/13/2002 12/31/2026 $ 4,247,401 $ 6,048,971 Addison \ Kimball 1/12/2000 12/31/2024 $ 1,661,712 $ 1,606,563 Addison Corridor North 6/4/1997 6/4/2020 $ 6,530,610 $ 7,576,505 Archer \ Central 5/17/2000 12/31/2024 $ 2,653,162 $ 2,524,844 Avalon Park \ South Shore 7/31/2002 12/31/2026 $ 1,400,583 $ 1,854,453 Bloomingdale \ Laramie 9/15/1993 9/15/2016 $ 558 $ 461 Calumet \ Cermak 7/29/1998 7/29/2021 $ 49,574,507 $ 53,054,791 Cicero \ Archer 5/17/2000 12/31/2024 $ 3,237,314 $ 3,074,106 Commercial Avenue 11/13/2002 12/31/2026 $ 4,768,992 $ 4,519,006 Devon \ Western 11/3/1999 12/31/2023 $ 6,552,201 $ 8,894,456 Drexel Boulevard 7/10/2002 12/31/2026 $ 89,651 $ 125,183 Eastman \ North Branch 10/7/1993 10/7/2016 $ 837,223 $ 1,600,478 Edgewater \ Ashland 10/1/2003 12/31/2027 $ 3,698,708 $ 3,540,871 Edgewater 12/18/1986 12/18/2009 $ 1,450,075 $ 5,704,147 Englewood Mall 11/29/1989 11/29/2012 $ 4,756,379 $ 5,337,092 Greater Southwest Industrial West 4/12/2000 12/31/2024 $ 5,435,794 $ 5,356,303 Homan \ Grand Trunk 12/15/1993 12/15/2016 $ 1,827,574 $ 2,201,719 Homan \ Arthington 2/5/1998 2/5/2021 $ 3,214,693 $ 3,594,482 Lake Calumet 12/13/2000 12/31/2024 $ 10,380,840 $ 10,640,445 Lakefront 3/27/2002 12/31/2026 $ 298,667 $ 515,322 Lakeside \ Clarendon 7/21/2004 12/31/2028 $ 62,962 $ 62,031 LaSalle Central 11/15/2006 12/31/2030 $ 9,672,999 $ 9,065,644 Lawrence \ Pulaski 2/27/2002 12/31/2026 $ 3,695,149 $ 3,049,277 Madden \ Wells 11/6/2002 12/31/2026 $ 641,120 $ 754,067 Michigan \ Cermak 9/13/1989 9/13/2012 $ 2,466,199 $ 3,250,660 Midway Industrial 2/16/2000 12/31/2024 $ 3,836,738 $ 4,930,051 North Branch North 7/2/1997 12/31/2021 $ 18,084,904 $ 19,430,360 North Branch South 2/5/1998 2/5/2021 $ 18,541,618 $ 24,297,532 Peterson \ Cicero 2/16/2000 12/31/2024 $ 16,755 $ 17,714 Peterson \ Pulaski 2/16/2000 2/16/2023 $ 3,230,472 $ 3,705,628 Ravenswood Corridor 3/9/2005 12/31/2029 $ 972,879 $ 478,783 River South 4/30/1997 4/30/2020 $ 29,920,568 $ 44,633,843 Roosevelt \ Cicero 2/5/1998 2/5/2021 $ 5,423,528 $ 7,847,658 Roosevelt \ Racine 11/4/1998 12/31/2022 $ 1,274,011 $ 1,014,891 Roseland \ Michigan 1/16/2002 12/31/2026 $ 1,105,516 $ 1,043,576 Ryan \ Garfield 12/18/1986 12/18/2009 $ 4,838,265 $ 10,595,401 South Works Industrial 11/3/1999 11/3/2022 $ 496,314 $ 513,057 Stockyards Annex 12/11/1996 12/31/2020 $ 9,685,974 $ 10,660,114 West Pullman 3/11/1998 3/11/2021 $ 10,694 $ 55,093 Western Ogden Industrial Corridor 2/5/1998 2/5/2021 $ 6,633,022 $ 15,913,089 Totals $ 273,580,342 $ 331,599,681

13

It is possible that some of these districts have projects underway for which funds have not been disbursed or reported, and there may be private investment occurring, as that is reported as “n/a” in the table. Also, some of these districts were created earlier than the required reporting starting point of 1999, so that they may have made investments prior to that year. The more important point is that they did not require additional funds through debt financing but generated sufficient revenue based on pre-existing growth in values. This indicates failure to pass the ‘but for’ test – that growth would not have occurred but for the TIF. The capture of property value is best illustrated by the LaSalle Central TIF district, which generated $9.6 million dollars in 2006 – before any redevelopment activity could be undertaken. These tax dollars to the district were due solely to the growth in property values in the 2006 City reassessment. The frozen EAV for the district was calculated with 2005 values, and the district therefore benefited from the increase in 2006. These tax dollars to the district fund are clearly not a result of investment, but of normal growth in property values. The LaSalle Central TIF district encompasses the financial district of downtown Chicago, in the Loop and West Side Community Areas.11 It was designated primarily to provide resources for rehabilitation of buildings for current and new uses, especially of historic structures. Other uses include improvements to the Chicago River seawall, improvements to open spaces along the river, enhancements to transit stations, and upgrades to streets and alleys. None of these address blight or impending blight and two out of the three projects estimated to be undertaken in 2008 are subsidies to private companies (NAVTEQ and The Ziegler Companies, Inc.). There are an additional 48 districts that have no funds allocated to debt payments but have made public investments totaling $132,260,580 in FY1999-2007. In spite of these expenditures they still have a substantial combined fund balance of $282,719,559 and revenues to date of $473,833,205. Some of the growth in value can be attributed to TIF activities, since they have expended funds on projects, but not all of it since clearly they could collect revenue to start redevelopment without borrowing.
City of Chicago Tax Increment Financing Districts No Funds Reserved for Debt Service Public Investment FY1999-2007 Date Authorized 9/29/1999 12/21/1994 7/21/1999 1/14/1997 7/13/1994 7/8/1998 3/27/2002 1/10/1996 1/10/2001 Date Expires 9/29/2022 12/21/2017 7/21/2022 12/31/2021 7/13/2017 7/8/2021 12/31/2026 12/31/2020 12/31/2025 Fund Balance (2007) $ 1,230,353 $ 953,391 $ 1,574,341 $ 9,643,781 $ 404,398 $ 3,935,891 $ 150,889 $ 884,528 $ 2,471,589 Revenues to Date (2006) $ 1,778,860 $ 1,690,055 $ 2,218,999 $ 11,687,471 $ 1,332,643 $ 6,484,981 $ 471,466 $ 1,824,003 $ 2,555,773 Public Investment 1999-2007 $ 326,712 $ 1,359,667 $ 13,100,000 $ 2,250,000 $ 631,622 $ 2,209,023 $ 309,733 $ 945,750 $ 33,825

District 111th \ Kedzie 126th and Torrence 24th \ Michigan 35th and Halsted 41st and King 43rd and Cottage Grove 45th \ Western 49th and St. Lawrence 53rd Street
11

Please see maps in the Appendices for locations of the TIF districts discussed.

14

City of Chicago Tax Increment Financing Districts No Funds Reserved for Debt Service Public Investment FY1999-2007 Date Authorized 5/17/2000 10/2/2002 11/17/1993 4/1/1998 5/16/1990 5/12/1999 1/12/2000 1/12/2000 11/4/1998 11/12/1998 4/12/2000 7/7/1999 9/29/1999 2/5/2003 7/10/1996 6/27/2001 10/7/1993 3/10/1999 10/14/1988 8/30/2000 6/10/1998 6/27/2001 8/30/2000 7/30/1997 12/2/1998 6/7/2000 9/9/1998 1/10/2001 3/19/1997 12/5/1990 5/12/1999 4/12/2000 6/10/1998 6/10/1996 1/12/2000 10/27/1986 1/12/2000 6/27/2001 1/20/1999 Date Expires 12/31/2024 12/31/2026 11/17/2016 4/1/2021 5/16/2013 12/31/2023 12/31/2024 12/31/2024 12/31/2022 12/31/2022 12/31/2024 7/7/2022 9/29/2022 12/31/2027 7/10/2019 12/31/2025 10/7/2016 12/31/2023 10/14/2011 12/31/2024 6/10/2021 12/31/2025 12/31/2024 7/30/2020 12/2/2021 12/31/2024 9/9/2021 12/31/2025 12/31/2021 12/5/2013 5/12/2022 12/31/2024 6/10/2021 6/10/2019 12/31/2024 12/31/2010 12/31/2024 12/31/2025 1/20/2022 Fund Balance (2007) $ 5,193,834 $ 115,604 $ 1,437,655 $ 350,439 $ 2,868,601 $ 1,076,893 $ 8,421,679 $ 3,313,047 $ 12,625,006 $ 29,932,342 $ 15,218,512 $ 4,356,438 $ 4,220,781 $ 2,889,492 $ 1,132,560 $ 10,969,042 $ 5,211,536 $ 1,739,362 $ 6,042,386 $ 10,378,035 $ 38,559,991 $ 5,075,720 $ 400,007 $ 1,634,947 $ 12,834,621 $ 1,530,905 $ 7,714,345 $ 14,356,280 $ 2,839,717 $ 5,080,536 $ 3,766,223 $ 1,507,957 $ 5,664,109 $ 86,694 $ 6,074,219 $ 910,364 $ 10,120,892 $ 10,473,681 $ 5,345,946 $ 282,719,559 Revenues to Date (2006) $ 6,912,536 $ 308,646 $ 2,473,363 $ 2,056,751 $ 8,011,097 $ 1,613,277 $ 9,655,928 $ 4,331,342 $ 13,786,856 $ 62,240,454 $ 31,481,467 $ 5,660,687 $ 5,951,077 $ 3,678,510 $ 2,419,343 $ 12,014,552 $ 6,612,138 $ 3,264,711 $ 13,247,609 $ 7,165,316 $ 70,814,921 $ 8,793,326 $ 1,352,781 $ 4,891,564 $ 20,097,201 $ 5,832,040 $ 10,059,309 $ 24,032,265 $ 9,208,940 $ 5,945,428 $ 10,548,575 $ 3,403,000 $ 10,586,689 $ 792,777 $ 3,816,649 $ 7,531,569 $ 13,476,507 $ 21,032,291 $ 8,687,462 $ 473,833,205 Public Investment 1999-2007 $ 128,724 $ 188,411 $ 1,074,435 $ 1,708,166 $ 5,478,525 $ 774,304 $ 220,598 $ 4,950 $ 769,580 $ 8,224,896 $ 12,772,095 $ 609,917 $ 594,491 $ 945,381 $ 1,243,481 $ 1,434,154 $ 1,956,314 $ 650,428 $ 8,827,834 $ 6,119,725 $ 8,292,848 $ 2,746,237 $ 535,064 $ 3,468,826 $ 971,121 $ 4,280,762 $ 329,011 $ 5,238,920 $ 6,772,754 $ 1,116,003 $ 7,217,637 $ 1,053,540 $ 574,104 $ 677,800 $ 8,126 $ 2,600,000 $ 515,122 $ 10,057,273 $ 912,691 $132,260,580

District 63rd \ Pulaski 67th \ Cicero 72nd and Cicero 89th \ State 95th and Stony Island Archer Courts Belmont \ Central Belmont \ Cicero Bronzeville Canal \ Congress Chicago \ Kingsbury Clark \ Montrose Clark \ Ridge Diversey \ Narragansett Division \ Hooker Englewood Fullerton \ Normandy Greater Southwest Industrial East Howard \ Paulina Jefferson\Roosevelt Kinzie Industrial Corridor Lawrence \ Broadway Monteclare North \ Cicero Northwest Industrial Corridor Ohio \ Wabash Portage Park River West Roosevelt \ Canal Roosevelt \ Homan Roosevelt \ Union South Chicago Stony Island \ Burnside West Grand West Irving Park West Ridge \ Peterson Western Avenue North Wilson Yard Woodlawn Totals

15

The Wilson Yard district in the Uptown Community Area is a good example of a district that has partially captured revenues from growth that was occurring without TIF activity. Uptown is an immigrant entry neighborhood that has experienced noticeable gentrification over the past decade or so. The 144 acre TIF includes an old train yard – basically a large parcel of vacant land – as well as multi-family residential buildings, and older commercial buildings. The neighborhood is part of a larger area of the City, commonly known as Lakeview, which also includes the more affluent Lincoln Park neighborhood and rapidly gentrifying Lincoln Square. The case for authorizing this district was primarily based on EAV growth that was relatively slower than Lakeview as a whole and the presence of older buildings, as well as “buffer” issues between institutional use properties and other use properties. It is not surprising that growth in this district, which is in a generally lower income neighborhood, is slower than Lakeview as a whole, but there is still significant growth as evidenced in the gentrification in recent years. From the authorization of Wilson Yard in 2001 to 2002 the EAV of the district grew by 45%, with no activity and no debt incurred. As of the end of FY2003, with no public investment of any kind, the district had a fund balance of $3,440,691. This is clearly revenue not caused by TIF, but allocated for use in TIF. The first use of this money was in 2005 when the City purchased parcels of land with TIF funds ($5,000,000). By the end of FY2005 the EAV growth from 2001 was 142% and the fund balance had reached over $6 million, with total revenues to date of over $11 million. Even though additional public investments were made in FY2007 ($5,057,273), the district still reported a fund balance of $10,473,681 – because revenues as of 2007 reached 21,032,291. This increase in revenues reflects property value growth measured by the City reassessment of 2006, not growth due to TIF development. While these examples – LaSalle Central and Wilson Yard – illustrate that some appropriation of revenues to TIF districts are not due to TIF activity, it is possible that TIF can be utilized to make significant improvements and increase property values. The Central Loop TIF district has played at least some role in Chicago’s downtown redevelopment. The Central Loop district is the core of the central business district, bounded by Wacker Drive to the north, Michigan Avenue to the east, Congress Parkway on the west, and Dearborn, LaSalle and N. Franklin to the west. Funds from the Central Loop TIF were used for infrastructure such as train station improvements, ornamental lighting, alley lighting and median landscaping (Randolph/Washington Stations - $13,500,000; Lake St., Michigan to Wacker Drive – ornamental lighting - $5,068,000; LaSalle, Wacker to Washington – median landscaping $94,000). Renovation and rehabilitation of Hotel Allegro (former Bismark, $5,836,073), Hotel Burnham ($10,888,713) and Oxford House/Hotel Monaco ($1,700,000) were subsidized by TIF funds. The Chicago Theater ($16,068,000), the Goodman ($18,800,000), the Oriental ($17,000,000) and the Palace ($7,312,875) have all received funds for façade preservation and renovations as part of the creation of the Theatre District.12 These projects are in addition to commercial and residential developments partially funded by the Central Loop TIF. The question still remains as to whether these improvements would have occurred without being subsidized by TIF revenues.

12

All figures are from data collected from annual reports and redevelopment agreements by the Neighborhood Capital Budget Group. “NCBG’s TIF Almanac.” Neighborhood Capital Budget Group (2003).

16

The Central Loop TIF district was authorized in 1984 and will expire in December 31, 2008. The district has generated the most increment funds to date (2006) of any Chicago district— $861,852,830. It also has the most money reserved for debt service, with $138,183,589 of the 2007 budget reserved for debt payment. The annual reports do not list the total amount of debt, only what is reserved for payments, so the total amount of remaining debt is unknown. The district had a substantial fund balance of $254,990,539 as of 2007. A little less than half of the taxes generated by the Central Loop TIF go to the district.13 There are 1,108 parcels in the Central Loop TIF district, representing a total 2007 Equalized Assessed Value of $3,075,597,254. At the building level, there are buildings in the Central Loop TIF that do not contribute at all to the general tax base, because they were constructed after the establishment of the TIF. These buildings arguably represent the success of the TIF in creating property value and improving downtown. EAV and increment growth for the district, as well as the distribution of tax dollars, are summarized in the table below.
Central Loop Tax Increment Financing District Frozen Value $ 985,292,154 Equalized Value Increment Value Tax Dollars To Other Agencies To District 2002 $ 1,853,497,414 $ 868,205,260 $ $ 71,699,710 63,179,297 2003 $2,132,127,958 $1,146,835,804 $ $ 63,383,844 73,775,947 2004 $ 2,359,216,203 $ 1,373,924,049 $ $ 61,803,185 87,727,496 2005 $ 2,603,135,368 $ 1,617,843,214 $ $ 58,920,471 98,267,070 2006 $ 3,075,597,254 $ 2,090,305,100 $ 52,240,190 $ 111,779,391 % Change 2002-2006 65.93% 140.76% -27.14% 76.92%

While the Central Loop TIF has been cited as an example of successful use of TIF as an economic development tool, it is important to keep in mind the caveat that some development in the district might have occurred without TIF subsidies. And since keeping such a substantial amount of EAV out of the property tax base caused higher taxes for individual City taxpayers, whether or not the benefits exceed the costs is a critical question. TIF and the Chicago Public Schools Because schools in Illinois rely so heavily on property taxes for their funding14, the issue of the effect of TIF on schools is of great concern. The important factor here is that TIF lowers the tax base available to schools, not that TIF districts collect money that schools would otherwise have received. The restriction in the property tax base as a result of TIF does not mean that the Chicago Public Schools (CPS) would receive a substantial infusion of money when a district expires and that EAV is returned to the general tax base, although they would receive some additional property tax revenue. The amount that the school district can raise from property taxes is restricted to an increase in their total property taxes roughly equal to inflation through the calculation of a maximum tax rate.15 The calculation of their tax rate excludes new property and dissolved TIF EAV, but the EAV the rate is applied to is inclusive of those values. In the
13 14

In some downtown TIF districts, most or almost all of the tax revenues are going to the districts. Illinois ranks 49th in the nation in the state share of education funding according to the National Center for Education Statistics, “Revenue and Expenditure for Public Elementary and Secondary Education (Fiscal Year 2006), April 2008; http://nces.ed.gov. 15 This is due to the PTELL calculation, as discussed earlier.

17

first year a TIF expires and the EAV is returned to the base, CPS would have the same tax rate they would have had without the additional EAV, but they would be able to apply it to a higher EAV, resulting in more tax dollars. If, for example, the Central Loop TIF had expired in 2005 CPS would have been able to collect approximately $47,481,754 in additional property taxes. This amount is, however, only about 2.5% of their total property tax extension. In addition, General State Aid (GSA) allocated to CPS is affected by EAV and an estimated 70% of property taxes “lost” to TIF are compensated for by increased GSA.16 If CPS received the estimated $47,481,754 in additional property taxes they would receive $33,237,228 less in GSA, for a net gain of only $14,244,526. While the magnitude of the tax dollar effect on CPS is relatively small it still represents a diversion of resources from one budget priority to another. Use of TIF extensively for economic development shifts the balance of how City tax dollars are spent, and in a way that is not transparent to taxpayers. Chicago Tax Rate If the property value for all Chicago TIF districts had been included in the base for tax year 2006, the City composite tax rate would have been 11% lower.17 We can estimate this rate by returning all EAV currently allocated to TIF to the general tax base, and recalculating tax rates for all of the taxing agencies, and the composite of all of them. The rate in 2006 if all TIF EAV were returned to the base would have been 4.732%, whereas the actual 2006 rate was 5.302%. This means that individual tax bills would also have been 11% lower in 2006. It is important to note that this is not the same as an estimate of what would have happened had there never been any TIF districts, since some growth has been created by TIF. The point is that returning the TIF increment value to the tax base is important to the successful use of TIF, since that provides the long-term benefit of higher taxable property value and thus lower tax rates and lower tax bills. Benefits to Taxpayers The benefits of TIF, in the case that it successfully creates growth, may not be evenly distributed across taxpayers. The premise of TIF is that if it is successful, all taxpayers benefit when districts expire and the increased EAV is added to the general tax base, in return for foregoing the growth in EAV over the life of the TIF (even growth that would have occurred without TIF). In other words, all taxpayers in the City bear the burden of tax rates that are higher than they would otherwise have been, and then reap the benefit of the lower rate when a TIF expires. But there is some additional benefit to the specific districts in the form of completed projects, which presumably provide greater benefits to those within (or close to) the districts than they do to all taxpayers in general. This only underscores the importance of rigorous evaluation of the effectiveness of TIF and an analysis of the costs and benefits – if some taxpayers benefit more than others, those that benefit less need to be satisfied that the overall benefit is worth their costs.

16

Rachel Weber. “Equity and Entrepreneurialism: The Impact of Tax Increment Financing on School Finance.” Urban Affairs Review 38, no. X (2003). 17 This means the districts would technically have had to be expired in 2005, so that the EAV is included in the 2006 general tax base; in the first year, it would be excluded and the agencies would get some additional dollars, as in the example of CPS above.

18

Recent Recommendations Regarding TIF Over the history of the use of TIF in Illinois various non-profit and civic groups have made recommendations on their operation. One of the most prominent critics of TIF, the Neighborhood Capital Budget Group (NCBG), provided extensive data on TIF districts on their website and produced two substantial reports.18 Most recently, Cook County Commissioner Quigley and the Civic Federation have each issued evaluations and recommendations with regard to TIF. These two reports are summarized below, followed by a brief description of recent improvements in TIF data accessible online. Cook County Commissioner Quigley released a report in April of 2007, “A Tale of Two Cities: Reinventing Tax Increment Financing”,19 which made numerous recommendations for reform to both the way TIF operates and transparency. The operational changes called for in the report include imposing caps on increment revenues, inflation adjustments to the frozen EAV, limiting portability of funds between districts, and replacing the Chicago Development Commission that oversees TIFs with neighborhood level institutions. Transparency improvements proposed include requiring redevelopment plans to give an estimate of the loss for all impacted local governments over the life of a proposed TIF district, providing a detailed accounting of surplus funds in TIF accounts, making information about TIFs available on-line, and putting TIF information on tax bills. The tax bill proposal has generated interest from groups and policy makers who value increasing transparency, but there are several problems with it. Quigley’s proposal would give an estimated “TIF tax rate” and “TIF taxes” on tax bills of property within a TIF district; but there is currently no accurate method of estimating the effect of TIF on tax rates, and it affects all taxpayers, not just those within TIF districts. The Civic Federation produced a comprehensive report on TIF in 2007 which included recommendations to improve transparency and information available to taxpayers.20 They called for full financial information on TIFs to be included in municipal budgets, for complete information on TIFs to be available electronically via the internet, and for every district to undergo a comprehensive public review every ten years. These measures, while they do not address the question of the costs or effectiveness of TIF, would at least provide taxpayers with more information on how their tax dollars are being used. Some additional transparency has been achieved since these reports. The City’s Department of Planning and Development website now includes two page summaries on each TIF district, in addition to the maps that have been available there.21 The Cook County Clerk’s Office has enhanced the amount of TIF information available on their website, providing an online version of the Tax Increment Agency Distribution Summary that details the frozen EAV, full EAV and tax dollars collected for every TIF district in the County. They also have summaries of TIF revenues for the past two tax years for districts in the City and Suburbs.22
18 19

www.ncbg.org; NCBG ceased operations in February of 2007, but the website is still available. Thomson, Jeremy, Jason Liechty, and Mike Quigley. “A Tale of Two Cities: Reinventing Tax Increment Financing.” Cook County Commissioner, 10th District. Mike Quigley (2007). 20 “Tax Increment Financing (TIF): A Civic Federation Issue Brief”. 2007. Civic Federation. http://www.civicfed.org/articles/civicfed_260.pdf. 21 http://egov.cityofchicago.org. 22 www.cookctyclerk.com/sub/TIF.asp.

19

Brief Review of Relevant Research Widespread use of TIF to spur economic development has generated debate regarding both its effectiveness as an economic development tool and its impact on the rest of the property tax system, taxpayers and the other taxing agencies. A true evaluation of TIF depends upon comparing current reality with TIF to a hypothetical non-TIF world. This type of comparison is difficult to make, due not only to the complexities of the property tax system but also to data intensity and the need for sophisticated statistical analysis. These empirical difficulties have resulted in relatively little thorough quantitative study evaluating the effectiveness and impact of TIF. The primary question regarding the effectiveness of Tax Increment Financing is whether or not it creates growth. Are increases in property value attributable to TIF activity, or would that growth have occurred without the TIF district? The answer to this question is important because if growth would have occurred without the TIF district, then the tax revenue collected by the district are revenues captured from all of the other taxing districts. There are researchers who have explored related questions with regard to TIF. Rachel Weber, et al investigated whether or not TIF causes disproportionate growth of lower-valued residential homes, relative to higher-valued ones and found no evidence that TIF had a greater impact on the lower-valued properties.23 This does not, however, address whether properties within a TIF grew more relative to those not in a TIF, all else equal. This group of researchers also looked at the effect of TIF on urban industrial property values in Chicago, using sale data from 1976 to 2001.24 The results showed that TIF did not raise property values for industrial properties located in TIF districts specifically designated industrial but those in mixed-use districts sold for no less (and sometimes significantly more) than industrial parcels not in a TIF. This is more likely indicative of properties changing use from industrial to commercial or residential uses, and not of the effect of TIF redevelopment. Dye and Merriman compared property value growth in municipalities that adopted TIF to municipalities without TIF adoption.25 Controlling for other municipal characteristics they found that property values grew more slowly in TIF adopting municipalities than in non-TIF adopting municipalities. While this comparison of municipal property value growth as a whole, between municipalities (as opposed to comparing TIF areas to non-TIF areas within a municipality), there is some indication that TIF may cause growth within districts, but at the expense of slower growth in the rest of a municipality. Benefield found that TIF had little effect on housing values within Chicago Community Areas compared to other demographic variables related to housing costs.26 His analysis included demographic variables for Community Areas such as household size, age, percentage of renter
23

Weber, Rachel, Saurav Dev Bhatta, and David Merriman. “The Impact of Tax Increment Financing on Residential Property Values.” Working Paper (2004). 24 Weber, Rachel, Saurav Dev Bhatta, and David Merriman. “Does Tax Increment Financing Raise Urban Industrial Property Values?” Urban Studies 40 (2003). 25 Dye, Richard F. and David F. Merriman. “The Effects of Tax Increment Financing on Economic Development.” Lincoln Institute of Land Policy, Working Paper #75, James H. Kuklinski, editor (1999). 26 Benefield, Nathan A. “The Effects of Tax Increment Financing on Home Values in the City of Chicago.” Paper prepared for presentation at the 61st Annual Meeting, Midwest Political Science Association, Chicago IL (2003).

20

households, and race, as well as variables related to TIF (percent of total land in TIF districts, years with TIF district). He used change in median home values between 1980 and 1990 to evaluate the relative effects and the TIF variables did not have a positive or significant effect on home values. All of these papers utilized econometric methods to evaluate the effect of TIF separate from other factors that influence changes in property values. Further research using the same type of statistical techniques is necessary in order to isolate the impact of TIF on growth in property values and economic development. Without this kind of robust evaluation we are unable to accurately assess the effectiveness of TIF or to measure its costs to taxpayers.

21

Conclusion The number of TIF districts in Chicago, the ease with which new districts can be approved (e.g. LaSalle Central), the magnitude of public funds involved, the impact on taxes and the lack of transparency demand a thorough evaluation and review of the use of TIF. Taxpayers deserve greater accountability for the use of their money than they currently receive. It is rare for economic development tools to be evaluated based on measurable results and return on investment, but those are the only defensible criteria for continued expansion of TIF as a mechanism for stimulating redevelopment and economic growth. The critical question of whether or not TIF causes growth (and if so, how much) cannot be sufficiently addressed by simply looking at the property values and money spent. This type of analysis requires sophisticated statistical research techniques, in order to measure the effect of TIF while holding everything else equal. Allocating resources to a thorough evaluation of the costs and benefits of TIF should be made a priority by policy makers in Chicago and Cook County. Recent policy efforts have focused on increasing transparency – recommendations by the Civic Federation, increased reporting by the County Clerk, and proposals by Commissioner Quigley at the County Board to include TIF impact estimates on tax bills. These are important measures, as one of the significant problems with TIF is the perception that it is free, when in fact it costs property taxpayers. But such increased transparency is not sufficient to safeguard the public interest. Taxpayers should not only have access to information on TIF districts and funds, and how tax bills are affected, but they should also know what they get in return for higher taxes.

22

References “Assessing the Impact of Tax Increment Financing in Northeastern Illinois: Empirical Analysis and Case Studies. 1997. Civic Federation. <http://www.civicfed.org/articles/civicfed_134.pdf> Benefield, Nathan A. “The Effects of Tax Increment Financing on Home Values in the City of Chicago.” Paper prepared for presentation at the 61st Annual Meeting, Midwest Political Science Association, Chicago IL (2003). Byrne, Paul F. "Determinants of Property Value Growth for Tax Increment Financing Districts." University of Illinois Institute of Government and Public Affairs, Working Paper 102 (2002). Developing Neighborhood Alternatives Project. “The Right Tool for the Job? An Analysis of Tax Increment Financing”. The Heartland Institute (2003). Dye, Richard F. and David F. Merriman. “The Effects of Tax Increment Financing on Economic Development.” Lincoln Institute of Land Policy, Working Paper #75, James H. Kuklinski, editor (1999). Gibson, Diane. "Neighborhood Characteristics and the Targeting of Tax Increment Financing in Chicago." Journal of Urban Economics 54 (2003): 309-327. Neighborhood Capital Budget Group. “NCBG’s TIF Almanac.” Neighborhood Capital Budget Group (2003). Schwartz, Chris, et al. “NCBG’s Chicago TIF Encyclopedia: The First Comprehensive Report on the State of Tax Increment Financing in Chicago.” Neighborhood Capital Budget Group (1999). “Tax Increment Financing (TIF): A Civic Federation Issue Brief”. 2007. Civic Federation. <http://www.civicfed.org/articles/civicfed_260.pdf>. Thomson, Jeremy, Jason Liechty, and Mike Quigley. “A Tale of Two Cities: Reinventing Tax Increment Financing.” Cook County Commissioner, 10th District. Mike Quigley (2007). Weber, Rachel. "Equity and Entrepreneurialism: the Impact of Tax Increment Financing on School Finance." Urban Affairs Review 38 (2003): 1-25. Weber, Rachel, Saurav Dev Bhatta, and David Merriman. "Does Tax Increment Financing Raise Urban Industrial Property Values?" Urban Studies 40 (2003): 2001-2021.

23

Weber, Rachel, Saurav Dev Bhatta, and David Merriman. "The Impact of Tax Increment Financing on Residential Property Values." Working Paper (2004).

24

Appendix A
City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ $ $ $ $ $ $ $ $ 404,398 3,935,891 762,311 150,889 6,181,493 5,963,035 14,222,283 2,287,331 884,528 35,436,578 2,471,589 2,609,313 5,193,834 115,604 69,954 76,352,778 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,332,643 6,484,981 1,605,086 471,466 6,328,645 6,025,083 13,364,894 2,104,549 1,824,003 2,158,563 2,555,773 2,969,311 6,912,536 308,646 64,864 10,280,751 $ 3,320,643 $ 4,713,160 $ $ 128,724 188,411 $ $ $ 945,750 1,532,941 33,825 $ 1,718,708 $ 309,733 $ $ 631,622 2,209,023 426,967 1,778,860 1,398,477 1,797,656 1,690,055 2,218,999 227,490 864,327 11,687,471 1,046,044 $ 2,250,000 $ $ $ $ 326,712 182,899 205,563 1,359,667 $ 974,616 $ 1,155,563 Public Investment 1999-2007

TIF Name 105th \ Vincennes 111th \ Kedzie 119th \ Halsted 119th \ I-57 126th and Torrence 24th \ Michigan 26th \ King Drive 26th \ Kostner 35th \ Wallace 35th and Halsted 35th and State 40th and State 41st and King 43rd and Cottage Grove 43rd and Damen 45th \ Western 47th \ Ashland 47th \ Halsted 47th \ King 47th \ State 49th and St. Lawrence 51st \ Archer 53rd Street 60th and Western 63rd \ Ashland 63rd \ Pulaski 67th \ Cicero 69th \ Ashland 71st \ Stony Island

Date Author 10/3/2002 9/29/1999 2/6/2002 11/6/2002 12/21/1994 7/21/1999 1/11/2006 4/29/1998 12/15/1999 1/14/1997 1/14/2004 3/10/2004 7/13/1994 7/8/1998 8/3/1994 3/27/2002 3/27/2002 5/29/2002 3/27/2002 7/21/2004 1/10/1996 5/17/2000 1/10/2001 5/9/1996 3/29/2006 5/17/2000 10/2/2002 11/3/2004 10/7/1998

Date Expires 12/31/2025 9/29/2022 12/31/2026 12/31/2026 12/21/2017 7/21/2022 12/31/2030 4/29/2021 12/31/2023 12/31/2021 12/31/2028 12/31/2028 7/13/2017 7/8/2021 8/3/2017 12/31/2026 12/31/2026 12/31/2026 12/31/2026 12/31/2028 12/31/2020 12/31/2024 12/31/2025 5/9/2019 12/31/2030 12/31/2024 12/31/2026 12/31/2028 10/7/2021

Frozen Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,268,074 14,456,141 18,853,913 16,097,672 1,226,037 15,874,286 2,834,583 9,047,402 80,938,228 3,978,955 129,892 7,038,638 5,596,786 2,188,976 53,606,185 39,151,640 61,269,066 19,279,360 683,377 29,522,751 23,168,822 2,464,026 56,171,856 813,600 53,506,725

2006 Equalized Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 4,836,450 24,815,658 32,611,443 33,101,302 21,669,463 29,196,194 4,842,977 16,589,317 146,737,945 11,567,852 3,152,210 50,351,279 7,895,035 45,485,945 5,065,283 94,412,874 92,950,909 186,669,520 8,563,960 42,543,776 38,463,876 7,665,741 96,444,204 2,082,084 5,858,921 108,139,678

2006 Estimated Increment Value $ $ $ $ $ $ $ $ $ $ $ $ $ 3,568,376 10,359,517 13,757,530 17,003,630 20,443,426 13,321,908 2,008,394 7,541,915 65,799,717 7,588,897 3,022,318 43,312,641 2,298,249

Fund Balance (2007) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 444,912 1,230,353 1,855,915 2,080,149 953,391 1,574,341 217,506 910,156 9,643,781 1,053,989

Reserved for Debt Service

$ 13,100,000

$ 43,296,969 $ (48,540,902) $ $ $ $ $ $ $ $ $ $ $ 55,261,234 31,681,843 167,390,160 7,880,583 13,021,025 15,295,054 5,201,715 40,272,348 2,082,084 5,045,321 54,632,953

City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ 2,905,344 2,088,148 132,172 4,247,401 350,439 2,868,601 3,366,576 1,661,712 6,530,610 2,653,162 1,076,893 $ $ $ $ $ $ $ $ $ $ $ 3,737,114 3,111,538 72,787 6,048,971 2,056,751 8,011,097 5,104,239 1,606,563 7,576,505 2,524,844 1,613,277 $ 774,304 $ $ $ 1,708,166 5,478,525 1,539,000 $ 1,662,750 2,473,363 562,315 Public Investment 19992007 $ 1,074,435

TIF Name 72nd and Cicero 73rd and Kedzie 73rd \ University 79th \ Cicero 79th \ Southwest Highway 79th Street 79th \ Vincennes 83rd \ Stewart 87th \ Cottage Grove 89th \ State 95th and Stony Island 95th and Western Addison \ Kimball Addison Corridor North Addison South Archer \ Central Archer Courts Armitage \ Pulaski Austin Commercial Avalon Park \ South Shore Belmont \ Central Belmont \ Cicero Bloomingdale \ Laramie Bronzeville Bryn Mawr \ Broadway Calumet \ Cermak Canal \ Congress Central Loop Central West Chatham Ridge Chicago \ Central Park

Date Author 11/17/1993 11/17/1993 9/13/2006 6/8/2005 10/3/2001 7/8/1998 9/27/2007 3/31/2004 11/13/2002 4/1/1998 5/16/1990 7/13/1995 1/12/2000 6/4/1997 5/9/2007 5/17/2000 5/12/1999 6/13/2007 9/27/2007 7/31/2002 1/12/2000 1/12/2000 9/15/1993 11/4/1998 12/11/1996 7/29/1998 11/12/1998 6/20/1984 2/16/2000 12/18/1986 2/27/2002

Date Expires 11/17/2016 11/17/2016 12/31/2030 12/31/2029 12/31/2025 7/8/2021 12/31/2031 12/31/2028 12/31/2026 4/1/2021 5/16/2013 7/13/2018 12/31/2024 6/4/2020 12/31/2031 12/31/2024 12/31/2023 12/31/2031 12/31/2031 12/31/2026 12/31/2024 12/31/2024 9/15/2016 12/31/2022 12/11/2019 7/29/2021 12/31/2022 12/31/2028 12/31/2024 12/31/2010 12/31/2026

Frozen Value $ $ 6,531,993 14,587,780

2006 Equalized Value $ $ 12,027,263 13,119,191

2006 Estimated Increment Value $ $ $ 5,495,270 (1,468,589) 23,277,316 13,374,561 2,915,320 39,512,005 6,568,943 21,393,238 15,383,147 9,175,387 32,627,175 16,810,573 5,546,908

Fund Balance (2007) $ $ $ $ $ $ $ $ $ $ $ $ $ 1,437,655 506,064

Reserved for Debt Service

$ $ $ $ $ $ $ $ $ $ $

36,347,823 21,576,305 10,618,689 53,959,824 3,827,328 2,622,436 16,035,773 883,731 14,400,224 37,646,911 85,326

$ $ $ $ $ $ $ $ $ $ $

59,625,139 34,950,866 13,534,009 93,471,829 10,396,271 24,015,674 31,418,920 10,059,118 47,027,399 54,457,484 5,632,234

$ $ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $ $ $ $

22,180,151 74,974,945 33,673,880 1,206,101 52,170,301 17,682,409 3,219,685 31,461,307 985,292,154 62,116,168 2,626,632 84,789,947

$ $ $ $ $ $ $ $ $ $ $

36,228,889 129,687,808 58,306,995 522,565 128,073,375 49,533,716 156,929,106 358,167,130 301,722,834 35,217,552 198,536,129

$ $ $ $ $ $ $ $ $ $ $

14,048,738 54,712,863 24,633,115 (683,536) 75,903,074 31,851,307 153,709,421 326,705,823 239,606,666 32,590,920 113,746,182

$ $ $ $ $ $ $ $ $ $ $

1,400,583 8,421,679 3,313,047 558 12,625,006 5,177,547 49,574,507 29,932,342 62,728,988 19,537,705 33,627,784

$ $ $ $ $ $ $ $ $ $ $ $

1,854,453 9,655,928 4,331,342 461 13,786,856 5,534,144 53,054,791 62,240,454 861,852,830 35,589,512 37,303,713 11,849,400 $ $ $ 8,224,896 $ 138,183,589 $ 4,805,431 $ 12,136,982 $ 5,931,115 2,904,208 1,668,048 $ 128,401,532 $ 15,109,507 $ $ 769,580 1,816,923 $ 433,985 $ $ 220,598 4,950

$ 3,075,597,254

$ 2,090,305,100

$ 254,990,539

26

City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 31,481,467 20,814,613 3,074,106 5,660,687 5,951,077 4,519,006 1,221,490 8,894,456 3,678,510 2,852,204 2,419,343 3,110,171 125,183 1,600,478 3,540,871 5,704,147 12,014,552 5,337,092 16,863,108 6,612,138 6,098,771 18,022,132 3,264,711 5,356,303 2,201,719 3,594,482 $ 72,778 $ $ $ $ 1,357,858 1,956,314 330,977 650,428 $ 434,121 $ 3,664,304 $ 562,644 $ 1,434,154 $ $ $ 945,381 288,661 1,243,481 $ 302,514 $ 210,239 $ 222,066 $ 458,073 $ $ 609,917 594,491 Public Investment 1999-2007 $ 12,772,095 $ 4,606,451 $ 1,284,436

TIF Name Chicago \ Kingsbury Chinatown Basin Cicero \ Archer Clark \ Montrose Clark \ Ridge Commercial Avenue Devon \ Sheridan Devon \ Western Diversey \ Narragansett Division \ Homan Division \ Hooker Division \ North Branch Drexel Boulevard Eastman \ North Branch Edgewater \ Ashland Edgewater Elston-Armstrong Industrial Corridor Englewood Englewood Mall Fullerton \ Milwaukee Fullerton \ Normandy Galewood \ Armitage Goose Island Greater Southwest Industrial East Greater Southwest Industrial West Harlem Industrial Park Harrison \ Central Hollywood \ Sheridan Homan \ Grand Trunk Homan \ Arthington

Date Author 4/12/2000 12/18/1986 5/17/2000 7/7/1999 9/29/1999 11/13/2002 3/31/2004 11/3/1999 2/5/2003 6/27/2001 7/10/1996 3/15/1991 7/10/2002 10/7/1993 10/1/2003 12/18/1986 7/19/2007 6/27/2001 11/29/1989 2/16/2000 10/7/1993 7/71999 7/10/1996 3/10/1999 4/12/2000 3/14/2007 7/26/2006 11/7/2007 12/15/1993 2/5/1998

Date Expires 12/31/2024 12/31/2010 12/31/2024 7/7/2022 9/29/2022 12/31/2026 12/31/2028 12/31/2023 12/31/2027 12/31/2025 7/10/2019 3/15/2014 12/31/2026 10/7/2016 12/31/2027 12/18/2009 12/31/2031 12/31/2025 11/29/2012 12/31/2024 10/7/2016 7/7/2022 7/10/2019 12/31/2023 12/31/2024 3/14/2030 12/31/2030 12/31/2031 12/15/2016 2/5/2021

Frozen Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 38,520,712 131,657 19,629,324 23,433,096 39,163,821 40,748,652 46,265,220 71,430,503 34,746,231 24,683,716 380,624 482,150 127,408 2,222,210 1,875,282 479,172 56,074,854 3,868,736 69,002,056 2,031,931 48,056,697 13,676,187 17,662,923 115,603,413

2006 Equalized Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 225,703,808 46,798,165 36,507,667 58,690,978 72,099,088 68,171,222 54,267,046 73,207,852 70,663,720 44,411,625 4,520,720 2,115,870 3,178,510 6,949,177 37,349,398 5,565,282 155,539,300 12,438,210 189,459,009 13,697,709 82,633,846 70,000,072 30,342,078 133,946,341

2006 Estimated Increment Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 187,183,096 46,666,508 16,878,343 35,257,882 32,935,267 27,422,570 8,001,826 1,777,349 35,917,489 19,727,909 4,140,096 1,633,720 3,051,102 4,726,967 35,474,116 5,086,110 99,464,446 8,569,474 120,456,953 11,665,778 34,577,149 56,323,885 12,679,155 18,342,928

Fund Balance (2007) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 15,218,512 8,839,937 3,237,314 4,356,438 4,220,781 4,768,992 1,274,203 6,552,201 2,889,492 2,828,307 1,132,560 341,303 89,651 837,223 3,698,708 1,450,075 10,969,042 4,756,379 19,401,823 5,211,536 13,407,666 7,590,464 1,739,362 5,435,794 701,650 1,827,574 3,214,693

Reserved for Debt Service

$ 12,866,170

$ $

35,753 2,658,362

$ $

3,515,118 13,903,339

$ $

3,479,365 11,244,977

$ $

27

City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 13,247,609 6,952,626 4,216,728 3,010,083 7,165,316 70,814,921 10,640,445 515,322 62,031 9,065,644 8,793,326 24,138,576 3,049,277 10,164,997 10,589,994 754,067 5,429,253 3,250,660 4,930,051 35,987,841 1,352,781 63,637,541 188,376,405 59,443,443 4,891,564 19,430,360 24,297,532 20,097,201 5,832,040 $ $ 971,121 4,280,762 $ $ 5,501,090 535,064 $ 12,045,202 $ 24,034,724 $ 2,968,974 $ 2,701,362 $ 4,166,112 $ 3,092,013 $ 3,639,860 $ 1,621,103 $ 1,948,757 $ $ 2,746,237 5,838,750 $ 2,370,744 Public Investment 1999-2007 $ $ $ $ $ $ 8,827,834 288,054 90,000 720,082 6,119,725 8,292,848 $ $ $ 797,545 525,521 393,225

TIF Name Howard \ Paulina Humboldt Park Irving \ Cicero Jefferson Park Jefferson\Roosevelt Kinzie Industrial Corridor Lake Calumet Lakefront Lakeside \ Clarendon LaSalle Central Lawrence \ Broadway Lawrence \ Kedzie Lawrence \ Pulaski Lincoln \ Belmont \ Ashland Lincoln Avenue Little Village Industrial Corridor Madden \ Wells Madison \ Austin Michigan \ Cermak Midway Industrial Midwest Monteclare Near North Near South Near West North \ Cicero North Branch North North Branch South Northwest Industrial Corridor Ohio \ Wabash

Date Author 10/14/1988 6/27/2001 6/10/1996 9/9/1998 8/30/2000 6/10/1998 12/13/2000 3/27/2002 7/21/2004 11/15/2006 6/27/2001 2/16/2000 2/27/2002 11/2/1994 11/3/1999 6/13/2007 11/6/2002 9/29/1999 9/13/1989 2/16/2000 5/17/2000 8/30/2000 7/30/1997 11/28/1990 3/23/1989 7/30/1997 7/2/1997 2/5/1998 12/2/1998 6/7/2000

Date Expires 10/14/2011 12/31/2025 12/31/2020 9/9/2021 12/31/2024 6/10/2021 12/31/2024 12/31/2026 12/31/2028 12/31/2030 12/31/2025 12/31/2024 12/31/2026 11/2/2017 12/31/2023 12/31/2031 12/31/2026 12/31/2023 9/13/2012 12/31/2024 12/31/2024 12/31/2024 7/30/2020 12/31/2014 3/23/2013 7/30/2020 12/31/2021 2/5/2021 12/2/2021 12/31/2024

Frozen Value $ $ $ $ $ $ $ $ 10,081,104 32,161,252 8,150,631 23,970,085 52,292,656 142,386,487 189,582,050 -

2006 Equalized Value $ $ $ $ $ $ $ $ $ 42,533,720 84,282,034 18,665,440 41,357,839 88,622,718 445,391,864 299,723,810 2,000,434 7,249,366

2006 Estimated Increment Value $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 32,452,616 52,120,782 10,514,809 17,387,754 36,330,062 303,005,377 110,141,760 2,000,434 4,157,781 152,792,861 57,493,594 128,598,580 22,170,568 19,298,536 44,460,887 9,499,326 35,615,319 13,155,186 29,978,239 251,925,498 7,649,635 269,466,059 770,350,792 194,593,502 24,209,278 78,258,585 105,190,689 123,132,367 28,446,732

Fund Balance (2007) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,042,386 3,683,300 776,176 1,761,290 10,378,035 38,559,991 10,380,840 298,667 62,962 9,672,999 5,075,720 28,444,618 3,695,149 1,881,358 38,939,928 641,120 38,139,842 2,466,199 3,836,738 50,071,253 400,007 34,402,992 91,710,882 39,568,404 1,634,947 18,084,904 18,541,618 12,834,621 1,530,905

Reserved for Debt Service

$ 3,091,585 $ 4,192,663,826 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 38,603,611 110,395,843 43,705,743 2,457,347 63,741,191 1,333,570 48,748,259 5,858,634 48,652,950 98,087,099 792,770 41,675,843 128,567,114 36,805,570 5,658,542 29,574,537 44,361,677 146,115,991 1,278,143

$ 4,345,456,687 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 96,097,205 238,994,423 65,876,311 21,755,883 108,202,078 10,832,896 84,363,578 19,013,820 78,631,189 350,012,597 8,442,405 311,141,902 898,917,906 231,399,072 29,867,820 107,833,122 149,552,366 269,248,358 29,724,875

$ 14,650,426 $ 141,290,141 $ $ 2,500,000 3,468,826

28

City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ $ $ 17,714 3,705,628 37,616,903 10,059,309 $ 18,926,972 $ 329,011 $ 9,823,032 Public Investment 1999-2007

TIF Name Pershing \ King Peterson \ Cicero Peterson \ Pulaski Pilsen Portage Park Pratt \ Ridge Industrial Park Conservation Area Pulaski Industrial Corridor Ravenswood Corridor Read \ Dunning River South River West Roosevelt \ Canal Roosevelt \ Cicero Roosevelt \ Homan Roosevelt \ Racine Roosevelt \ Union Roseland \ Michigan Ryan \ Garfield Sanitary and Ship Canal South Chicago South Works Industrial Stevenson \ Brighton Stockyards Annex Stockyards Industrial \ Commercial Stockyards Southeast Quadrant Stony Island \ Burnside Touhy \ Western West Grand West Irving Park West Pullman

Date Author 9/5/2007 2/16/2000 2/16/2000 6/10/1998 9/9/1998 6/23/2004 6/9/1999 3/9/2005 1/11/1991 4/30/1997 1/10/2001 3/19/1997 2/5/1998 12/5/1990 11/4/1998 5/12/1999 1/16/2002 12/18/1986 7/24/1991 4/12/2000 11/3/1999 4/11/2007 12/11/1996 3/9/1989 2/26/1992 6/10/1998 9/13/2006 6/10/1996 1/12/2000 3/11/1998

Date Expires 12/31/2031 12/31/2024 2/16/2023 12/31/2022 9/9/2021 12/31/2028 6/9/2022 12/31/2029 12/31/2015 4/30/2020 12/31/2025 12/31/2021 2/5/2021 12/5/2013 12/31/2022 5/12/2022 12/31/2026 12/18/2009 7/24/2014 12/31/2024 11/3/2022 12/31/2031 12/31/2020 3/9/2012 2/26/2015 6/10/2021 12/31/2030 6/10/2019 12/31/2024 3/11/2021

Frozen Value $ $ $ $ 1,116,653 40,112,395 111,203,219 65,084,552

2006 Equalized Value $ $ $ $ 1,450,757 60,229,370 274,372,215 118,191,436

2006 Estimated Increment Value $ $ $ $ 334,104 20,116,975 163,168,996 53,106,884

Fund Balance (2007) $ $ $ $ 16,755 3,230,472 48,102,537 7,714,345

Reserved for Debt Service

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

82,778,075 6,382,072 65,852,957 50,463,240 1,276,969 45,179,428 3,539,018 6,992,428 4,369,258 29,627,768 166,083 10,722,329 14,775,992 3,823,633 38,650,631 11,178,459 21,527,824 46,058,038 465,129 36,446,831 7,050,845

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

153,562,797 53,992,219 55,118,888 265,255,041 211,138,127 25,521,556 81,795,826 21,464,735 23,479,298 70,301,997 39,781,403 7,001,077 28,224,785 35,178,788 7,634,155 69,095,595 46,148,502 49,805,630 90,603,704 2,072,508 58,390,921 9,208,212

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

70,784,722 53,992,219 48,736,816 199,402,084 160,674,887 24,244,587 36,616,398 17,925,717 16,486,870 65,932,739 10,153,635 6,834,994 17,502,456 20,402,796 3,810,522 30,444,964 34,970,043 28,277,806 44,545,666 1,607,379 21,944,090 2,157,367

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

6,775,938 972,879 6,238,091 29,920,568 14,356,280 2,839,717 5,423,528 5,080,536 1,274,011 3,766,223 1,105,516 4,838,265 1,621,153 1,507,957 496,314 9,685,974 3,558,759 6,564,064 5,664,109 8,301,297 86,694 6,074,219 10,694

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

11,349,760 478,783 22,345,520 44,633,843 24,032,265 9,208,940 7,847,658 5,945,428 1,014,891 10,548,575 1,043,576 10,595,401 8,881,262 3,403,000 513,057 10,660,114 31,301,214 21,083,681 10,586,689 792,777 3,816,649 55,093 $ $ $ $ $ 1,000,000 574,104 359,550 677,800 8,126 $ 1,053,540 $ 7,217,637 $ 1,116,003 $ $ 5,238,920 6,772,754 $ 1,982,652

$ 1,154,369 $ 1,204,373

$

722,124

$ 3,294,031 $ 3,485,000 $ 363,990

29

City of Chicago Tax Increment Financing Districts Increment Revenues to Date (2006) $ $ $ $ $ $ 7,531,569 13,476,507 17,343,543 15,913,089 21,032,291 8,687,462 $ 10,057,273 $ 912,691 $ 253,294,779 Public Investment 1999-2007 $ $ $ 2,600,000 515,122 374,562 $ 2,043,682

TIF Name West Ridge \ Peterson Western Avenue North Western Avenue South Western Ogden Industrial Corridor Western \ Rock Island Wilson Yard Woodlawn Totals

Date Author 10/27/1986 1/12/2000 1/12/2000 2/5/1998 2/8/2006 6/27/2001 1/20/1999

Date Expires 12/31/2010 12/31/2024 12/31/2024 2/5/2021 12/31/2030 12/31/2025 1/20/2022

Frozen Value $ $ $ $ $ 1,617,926 71,205,617 69,515,261 33,184,486 55,960,211

2006 Equalized Value $ $ $ $ $ $ 7,640,403 146,788,015 172,863,669 128,608,487 165,931,258 81,206,867

2006 Estimated Increment Value $ $ $ $ $ $ 6,022,477 75,582,398 103,348,408 95,424,001 109,971,047 52,341,034

Fund Balance (2007) $ $ $ $ $ $ 910,364 10,120,892 12,156,506 6,633,022 10,473,681 5,345,946

Reserved for Debt Service

$ 28,865,833 $ 9,298,662,774

$18,622,897,755

$ 9,324,234,981

$ 1,528,538,201

$ 2,409,154,030

$ 509,942,278

30

Appendix B

32

T- 1 T- 2 T- 3 T- 4 T- 5 T- 6 T- 7 T- 8 T- 9 T- 10 T- 11 T- 13 T- 14 T- 15 T- 16 T- 17 T- 18 T- 19 T- 20 T- 21 T- 22 T- 23 T- 24 T- 25 T- 26 T- 27 T- 28 T- 29 T- 30 T- 31 T- 32 T- 33 T- 34 T- 35 T- 36 T- 37 T- 38 T- 39 T- 40 T- 41 T- 42 T- 43 T- 44 T- 45 T- 46 T- 47 T- 48 T- 49 T- 50

35th/Halsted 41st/King 43rd/Damen 49th/St Lawrence 60th/Western with Amendment 72nd/Cicero 73rd/Kedzie 95th/Stony Island 95th/Western 126th/Torrence Addison Corridor North Bryn Mawr/Broadway Central Loop Chatham Ridge Chinatown Basin Division/Hooker Division/North Branch Eastman/North Branch Edgewater Englewood Mall Fullerton/Normandy Goose Island Homan Arthington Homan/Grand Trunk Howard/Paulina Irving/Cicero Lincoln/Belmont/Ashland Michigan/Cermak Near North Near South Near West North Branch North North Branch South North/Cicero Read/Dunning River South Roosevelt-Cicero Ind. Corridor Roosevelt/Canal Roosevelt/Homan Ryan/Garfield Sanitary and Ship Canal Stockyards Annex Stockyards Industrial Corridor Stockyards Southeast Quadrant West Grand West Ridge/Peterson Western/Ogden Ind. Corridor 89th/State West Pullman

T- 52 T- 53 T- 54 T- 55 T- 56 T- 57 T- 58 T- 59 T- 60 T- 61 T- 62 T- 63 T- 64 T- 65 T- 66 T- 67 T- 68 T- 69 T- 70 T- 71 T- 72 T- 73 T- 74 T- 75 T- 76 T- 77 T- 78 T- 79 T- 81 T- 82 T- 83 T- 84 T- 85 T- 86 T- 87 T- 88 T- 89 T- 90 T- 91 T- 92 T- 93 T- 94 T- 95 T- 96 T- 97 T- 98 T- 99 T-100 T-101

Kinzie Industrial Corridor Pilsen Industrial Corridor Stony Island/Burnside 43rd/Cottage Grove 79th Street Corridor Jefferson Park Portage Park Calumet/Cermak Rd 71st/Stony Island Bronzeville Roosevelt/Racine(ABLA) Canal St/Congress Expy Northwest Industrial Corridor Woodlawn Greater Southwest Ind. Corrdor Archer Courts Roosevelt/Union (UIC) Pulaski Industrial Corridor Clark/Montrose Galewood/Armitage 24th/Michigan 111th/Kedzie Clark/Ridge Madison/Austin Devon/Western Lincoln Ave. South Works Industrial 35th/Wallace Belmont/Central Belmont/Cicero West Irving Park Western Avenue North Western Avenue South Central West Fullerton/Milwaukee Lawrence/Kedzie Midway Industrial Corridor Peterson/Cicero Peterson/Pulaski Greater Southwest Ind. (West) South Chicago Chicago/Kingsbury Midwest Cicero/Archer 51st/Archer 63rd/Pulaski Archer/Central Ohio/Wabash Jefferson/Roosevelt

33

T-102 T-103 T-104 T-105 T-106 T-107 T-108 T-109 T-110 T-111 T-112 T-113 T-114 T-115 T-116 T-117 T-118 T-119 T-120 T-121 T-122 T-123 T-124 T-125 T-126 T-127 T-128 T-129 T-130 T-131

Montclare Lake Calumet Ind. Cord. River West 53rd Street Englewood Neighborhood Division/Homan Humboldt Park Lawrence/Broadway Wilson Yard 105th/Vincennes 79th/Southwest Hwy. Roseland/Michigan 119th/Halsted Chicago/Central Park Lawrence/Pulaski 47th/Ashland 47th/King Lakefront 45th & Western 47th/Halsted Drexel Boulevard Avalon Park/South Shore 67th/Cicero 119th & I-57 Redevelopment Madden/Wells 87th/Cottage Commercial Avenue Diversey/Narragansett Edgewater/Ashland 35th/State

T-132 T-133 T-134 T-135 T-136 T-137 T-138 T-139 T-140 T-141 T-142 T-143 T-144 T-145 T-146 T-147 T-148 T-149 T-150 T-151 T-152 T-153 T-154 T-155 T-156 T-157 T-158 T-159 T-160 T-161

40th/State 83rd/Stewart Devon/Sheridan Pratt/Ridge 47th/State Lakeside/Clarendon 69th and Ashland Ravenswood Corridor 79th/Cicero 26th/King Western Avenue/Rock Island 63rd/Ashland Harrison/Central 73rd & University Touhy and Western LaSalle Central Harlem Industrial Park Conservation Area Stevenson/Brighton Addison South Armitage and Pulaski Little Village Elston/Armstrong Ind. Corridor Pershing/King 79th/Vincennes Austin Commercial Hollywood/Sheridan Weed/Fremont 134th Street and Avenue K Kennedy/Kimball Ogden/Pulaski

34

35

36

37

38

39