A group of aldermen including Alderman Daniel Solis formally called on Mayor Rahm Emanuel to declare a surplus in development funds and send that tax revenue back to public schools. Alderman said there may be tens of millions of dollars that could be pumped into the shrinking budgets of local schools. View the signed ordinance and it’s list of supporters here: Download the TIF Surplus Ordinance
WHAT IS TIF?
Tax Increment Financing is a special funding tool used by the City of Chicago to promote public and private investment across the city. Funds are used to build and repair roads and infrastructure, clean polluted land and put vacant properties back to productive use, usually in conjunction with private development projects. Funds are generated by growth in the Equalized Assessed Valuation (EAV) of properties within a designated district over a period of 23 years.
Funding levels for specific projects are coordinated with area plans and goals. When an area is declared a TIF district, the amount of property tax the area generates is set as a base EAV amount. As property values increase, all property tax growth above that amount can be used to fund redevelopment projects within the district. The increase, or increment, can be used to pay back bonds issued to pay upfront costs, or can be used on a pay-as-you-go basis for individual projects. At the conclusion of the 23-year period, the increase in revenue over the base amount is distributed annually among the seven taxing bodies in the city that are based on property values.
Under state law, areas proposed for TIF designation must possess numerous blighting factors to be eligible:
To help local companies expand and create employment oportunties for Chicago residents.
Qualifications and Restrictions
TIF assistance for eleigible projects usually exceeds $1 million. Participating companies and projects must comply with all federal, state and local program requirements.