Barely half the jobs promised by Tax Increment Financing projects that have consumed billions of taxpayer dollars in Chicago have been created, according to an analysis by the watchdog group Illinois PIRG (Public Interest Research Group).
The report comes one year after Mayor Rahm Emanuel’s Tax Increment Financing (TIF) Reform Panel released recommendations for fixing the economic development program and underscores the need to implement reform to protect taxpayers. Every year approximately $500 million of local property tax revenue flows to Chicago’s TIF districts. That money is largely shielded from public scrutiny, giving citizens little chance to hold local officials accountable for how it is handled.
Illinois PIRG’s report, “Jobs and TIF: An Analysis of Job Creation and Tax Increment Financing,” analyzes the records of 21 TIF-funded projects from the last decade with the biggest numbers of promised jobs. Each project examined was promised to create at least 200 jobs. The report checked to see whether the city is making sure developers are living up to their promises.
Poor Documentation, No Documentation
The findings show that among projects that promised to create the most jobs, there are unacceptably low levels of tracking and enforcement:
- Between 2000 and 2010, the City of Chicago spent more than $380 million dollars to create 32,396 jobs through Tax Increment Financing projects, but only 16,948 of those jobs were accounted for;
- 15 out of 21 projects with jobs covenants did not report meeting their jobs goals on an annual basis; and
- six of those projects, on which the City spent more than $129 million dollars, have no record of periodic monitoring or job creation.
“Given that the purpose of TIF is to use taxpayer dollars to create jobs and stimulate economic growth, it’s unacceptable that the City isn’t holding developers accountable for achieving these goals,” said Hailey Witt, field director for Illinois PIRG. “Taxpayers deserve to know if they’re getting what they paid for.”
TIF Panel Recommendations
Illinois PIRG recommends Emanuel implement his reform panel’s recommendations, which would create a standard set of metrics to regularly track the progress of TIF projects and review performance.
“Mayor Emanuel has showed us a year ago that he is committed to TIF reform by creating this panel, and their proposed reforms would move the city in the right direction. But it’s not enough to have these ideas on paper. The City Council should step up and pass an ordinance that the Task Force recommendations must be put in place,” said Witt.
Colin Briskman ([email protected]) is tax and budget researcher at Illinois PIRG.
“Jobs and TIF: An Analysis of Job Creating and Tax Increment Financing,” Illinois PIRG: http://www.illinoispirg.org/reports/ilp/jobs-and-tif