CTU and allies to push 'Responsible Budget Ordinance' to recoup TIF dollars for schools, parks, libraries and communities...
The Chicago Teachers Union has announced that it and its community allies will help arrange for the passage of the "Responsible Budget Ordinance" by the Chicago City Council. The ordinance provides that surplus TIF funds be put back to the schools, park district and other needy agencies of government, all of which have faced cuts in recent years. The ordinance gives one out: TIF districts with less than $5 million in surplus are exempt.
Chicago Mayor Rahm Emanuel announced the report of his "TIF Task Force" at an August 25, 2011 press briefing (above). The Task Force recommended that the mayor retain control over the TIF program in Chicago, but claimed that under Emanuel there would be more "transparency" than previously. Members of the Task Force included Lawrence Msall (far left above) of the Civic Federation, which supposedly provides "non partisan" research on municipal finances but in fact always slants it research towards the corporate party line and against workers and unions. Substance photo by George N. Schmidt.The ordinance comes as a direct challenge to Mayor Rahm Emanuel's "TIF Task Force," which gave the mayor a green light two months ago to continue mayoral control of the billions of dollars currently in the TIF funds, now and into the future.
An account of the press conference at City Hall was provided by the Grass Roots Collaborative and follows:
Aldermen and Community Introduce Ordinance, Challenge Mayor to Drain TIF Slush Fund
Responsible Budget Ordinance would return hundreds of millions of dollars toward schools, parks, and libraries
Approximately 80 community leaders together with Aldermen Waguespack, Arena, Burns, Fioretti, Foulkes, Moore, Moreno, Smith, and Sposato gathered on the second floor of City Hall to announce the introduction of the ‘Responsible Budget Ordinance’, a bill that would mandate the return of hundreds of millions of TIF dollars toward the original taxing bodies – schools, parks, and libraries.
“We need to look at the TIF program. Over the years Mayor Daley spent money and we’ve heard different things that have confused the tax payers, but just remember one thing…it’s taxpayers’ dollars.” said Alderman Waguespack, lead sponsor of the ordinance.
The explosive report issued by the Inspector General of TIF recipients being forced to donate to Maggie Daley’s charity only underscores the point: the TIF system must be reformed. “It is incredibly troubling that Chicago taxpayer money was abused so egregiously by Mayor Daley,” said Amisha Patel, Executive Director of the Grassroots Collaborative. “We call on Mayor Emanuel to push through real TIF reform. A key first step is to address the TIF slush fund – hundreds of millions of tax dollars require real accountability, and real purpose. The Responsible Budget Ordinance is a good first step.”
Ordinance supporters know that timing is crucial with budget discussions coming up in City Council.
Alderman Moore voiced support especially given the city’s budget deficits, “We expect its going to be a lot of painful sacrifices called for, we’re all prepared to share in those sacrifices, but we need to make sure those sacrifices are fair and equitable and that communities most in need get those dollars.”
Cuts are a major community concern, and have implications for education in neighborhood schools. David Hernandez, a teacher at Little Village Lawndale High School, stated ”We need to bring our students into the 21st century and release funds back to schools that desperately need them.”
“If we don’t invest in our schools and lower class sizes, we’re not going to have high quality education our children need. We are going to set the city back,” added Hyde Park Alderman Will Burns.
The City’s budget deficit looms at $654 million, but that does not include sister agency deficits, such as the Chicago Public Schools or Park District. Community leaders at the rally scoffed at heavy implications of the budget deficit for their own families.
“The mayor is talking about cutting police stations and laying off teachers - this will increase crime and increase class sizes, but we know there is hundreds of millions of dollars in TIF funds. And we know the City has given millions of dollars to corporations for their bathrooms and offices. Why do corporations get this while my community is suffering from the cuts. This isn't just,” said Alfredo Cabrera, a father and a leader with Brighton Park Neighborhood Council.
Earlier this year, Mayor Emanuel dismissed using TIF funds to close the budget gap, but community leaders are hopeful he will change his mind.
Donna Roberts of Action Now stated, “Is Rahm Emanuel going to be the Mayor of Downtown or is he going to be the Mayor of all Chicago?”
Last year the Chicago Mercantile Exchange received $15 million in TIF funds in order to renovate the Board of Trade’s bathrooms. Critics of the TIF program believe it systemically prioritizes downtown over neighborhood interests.
Supporting Organizations
Action Now, AFSCME, Bickerdike Redevelopment Corporation, Brighton Park Neighborhood Council, Chicago Coalition for the Homeless, Chicago Teachers Union, Kenwood Oakland Community Organization, SEIU Healthcare, SEIU Local 73, Southsiders Together Organized for Power, and Unite HERE.
ABOUT THE GRASSROOTS COLLABORATIVE
Community and labor groups present are organized by the Grassroots Collaborative, a coalition that forced Mayor Daley to use his first and only veto with the Big Box Ordinance which sought higher wages for workers employed by stores such as Walmart and Target. More recently, the Grassroots Collaborative organized the People’s City Council Meeting held on July 7, 2011 that brought together 19 Aldermen and 1600 community leaders in support of a progressive city agenda.
The responsible budget ordinance states as follows:
Responsible Budget Ordinance
Whereas, Tax increment financing (TIF) is a tool intended by state law to encourage economic development by providing public support to encourage investment in targeted areas that meet certain conditions of blight, decay or underperformance; and
Whereas, Tax increment financing is not an end in itself, but a crucial tool for supporting quality businesses, creating more jobs and building strong neighborhoods; and
Whereas, the City of Chicago’s neighborhoods are currently suffering from the economic recession; and
Whereas, in light of the current economic circumstances, a short-term infusion of funds back into the neighborhoods could provide a great benefit, helping achieve the ultimate goal of supporting strong neighborhoods; and
Whereas, every tax dollar released back to our neighborhoods this year is a dollar that could go a long way to ensuring the ongoing viability of critical services, such as schools, parks, and libraries; and
Whereas, even in these tough economic times, TIF districts throughout the City collected $469.9 million in property taxes in 2010; and
Whereas, multiple TIF Districts have surplus funds not required, pledged, earmarked, or otherwise designated for payment and securing of the obligations and anticipated redevelopment project costs; and
Whereas, 65 ILCS 5/11-74.4-7 requires that any monies held by a municipality and not required for the payment and securing of obligations of a tax increment financing district and/or redevelopment project costs shall be deemed to be "Surplus Funds"; and
Whereas, in the current economy, these Surplus Funds afford a means to meet basic needs throughout the City; and
Whereas, last year, pursuant to this statute, Mayor Daley declared a surplus, returning $187 million of funds levied from TIF districts; and
Whereas, in light of current needs, all those who live and work in the City would benefit from the redistribution of roughly half of these surplus funds back to the municipality, schools, parks, and other taxing entities;
Therefore, be it resolved, that:
SECTION 1. Recitals. The above recitals are incorporated herein and made a part hereof.
SECTION 2. This section shall apply only to City TIF districts with 2011 fund balances exceeding $5 million. For such TIF districts, the total revenues that are not already required, pledged, earmarked, or otherwise designated for payment of or securing of obligations at the close of this fiscal year shall be calculated. Fifty percent of this cumulative total shall be designated, declared, and distributed as Surplus Funds.
SECTION 3. As provided by 65 ILCS 5/11-74.4-7, within 180 days after the close of the City’s fiscal year 2011, Surplus Funds shall be distributed to the municipality and returned to the affected taxing districts, such as the school district and park district, to pay for necessary services.
A fact sheet provided by the Chicago Teachers Union issued on October 4, 2011 states the following:
Talking Points on the Responsible Budget Ordinance
What is the Responsible Budget Ordinance?
The Grassroots Collaborative is working together with Alderman Waguespack in order to help address the enormous budget crisis facing Chicago. The ordinance says that all TIF districts that have over $5 million in unallocated dollars (meaning, money just sitting around) gets totaled up, and 50% of that total money gets declared a surplus and returned to the original taxing bodies (City, schools, parks, libraries, County, etc). Why is the Responsible Budget Ordinance important?
Chicago’s neighborhoods are currently suffering from the economic recession, and every tax dollar allocated to these neighborhoods this year is a dollar that can be spent on preserving critical services for seniors, children, and parents. It would be irresponsible to let these funds sit idle in TIF accounts while we lay off teachers and other workers who have families that depend on them, and communities that benefit from their service.
How is the Responsible Budget Ordinance fair?
Cuts to the City and sister agency budgets will disproportionately affect low-income minority communities. We need revenue. $854 million in TIF money is sitting unallocated, while the City faces a budget deficit over $600 million dollars. This does not even account for the Chicago Public Schools, Chicago Park District, Cook County and other sister agencies who have their own budget deficits. This ordinance can potentially return hundreds of millions of dollars to our city budget, our schools, parks, and our libraries.
According to recent state level Census data, 33.6 percent of African-American Chicagoans are in poverty, while 23.2 percent of Latinos are in poverty, compared to just 11 percent of white people living below the poverty level. Cuts to public programs such as parks and libraries for example hurt low income families that cannot afford to hire private tutors or group music classes; and Public worker lay-offs disproportionately hurt African-Americans in particular. Startling figures from a study by the Center for Labor Research and Education at the University of California, Berkeley show: • While 25% of Chicago’s workers are Black, 42.4% of Chicago’s public sector workers are Black.
• Median wages for African Americans in the public sector are about 39% higher than their overall levels. For example, Black men in Chicago have a median wage of $22 in the public sector, compared to $14.56 in health care and social services and $12.55 in retail, the two next leading sectors employing Black workers.
Laying off public employees will disproportionally impact Chicago working families of color, further weakening neighborhoods at a time when they need greater investment, not devastating cuts.
What is the consequence of not passing the Responsible Budget Ordinance?
Chicago’s budget crisis is much larger than the $600 million that we all hear about. Including CPS and the Park District, we are looking at over $1 billion in deficits. Returning all unused TIF funds would invest hundreds of millions of dollars back to the taxing bodies without laying off workers, taxing working families, or privatizing any valuable city asset.
