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Abolish TIFs - Get Lower Property Taxes, More Equity & $20 Billion for U.S. Public Schools! Tom Tresser
Copyright © 2026 Tom Tresser, www.tresser.com, tom@tresser.com – Chicago, IL, USA. All rights reserved. No part of this book may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.
ISBN 978-0-557-62808-7 Imprint: Lulu.com Cover image: The author has done over 300 public community meetings called Illuminations and open enrollment civic training workshops since 2013. The TIF Illumimination Project logo was designed by Virginia Duran - www.virginiaduran.com. The TresserLabs logo was designed by the fabulous yourplanb – www.yourplanb.com. Book cover designed using Canva.
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Abolish TIFs – Get Lower Property Taxes, More Equity, and $20 Billion for U.S. Public Schools!
Contents Acknowledgements 1. Introduction – Why This Book 2. How Do We Know About This Subject? Answer: the TIF Illumination Project 3. How to Use this Book 4. What is a TIF? 5. How Do TIFs Work? 6. Setting the Context – TIFs & City Planning 7. What Can TIFs Do? A Critical Limitation 8. TIFs Harm the Public Good 8.1 TIFs Bleed Public Money FROM Serving the Public 8.1.1 TIFs and Public Schools 8.2 TIFs Cause Property Taxes to Rise Dramatically 8.3 TIFs Are Anti Distributional and Unfair 8.3.1 Public Dollars for Millionaires 8.3.2 Nothing of Substance for Poor Neighborhoods 8.4 TIF Spending is Off the Books 8.5 TIFs Pervert the Planning Process 8.5.1 Blight Everywhere – TIFs Anywhere 8.5.2 The “But For” Clause Is a Joke 8.6 TIFs Incentivize and Reward Corruption 9. TIFs Pervert Both Civics and Capitalism 9.1 TIFs Power Machine Politics 9.2 Trade Unions and Their Role in Supporting TIFs 9.3 TIFs as Crony Capitalism 10. TIFs Are a BIG Deal 10.1 The TIFs of Chicago 10.2 The TIFs of Suburban Cook County 10.3 The TIFs of Illinois 10.4 The TIFs of America 11. Gathering the Data to Understand the TIFs of Your Community 11.1. Questions to Ask to Illuminate Your TIFs 11.2 Where to Look 11.3 Filling in the Data Gaps 11.4 How to Count and Visualize TIF Data 11.5 How to Report TIFs 11.6 How to Engage Around TIFs 11.6.1 The Northfield TIF Fight – An Example of Engagement and Response 11.7 TIF Petitions 12. The Argument for Abolition 13. TIF Organizing as Part of a Larger Struggle for Economic Justice – Resources 14. Take On This Project – Reap Civic Love and Benefits! 15. Thanks To All the TIF Illuminators! 16. About the author
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Focus on Chicago - Information Supplementing Chapters Above C.1 Setting the Context – TIFs and City Planning – Chicago C.2 Heavy Presence of TIFs Does Nothing for Poor Neighborhoods C.3 TIFs Raise Property Taxes in Chicago and All Across Cook County C.4 Planning for Washington Park – An Egregious Example C.5 A Deep Dive Into a Washington Park TIF Project C.6 Billions for the Bears? C.7 Subsidies for Bloated Megaprojects Pushed Though City Hall in 2019 C.8 Bailing Out LaSalle Street Building Owners C.9 The “But For” Clause Is a Joke – A Tale of Two Grocery Stores C.10 TIFs Incentivize and Reward Corruption – Ed Burke C.11 Distributing Groceries and TIF Cash in the 25th Ward C.12 Massive TIF Abuse in Cicero C.13 TIFs Power Machine Politics – Mayor Daley and Beyond C.14 How to Count and Visualize TIF Data – Chicago Examples C.15 Engaging Around TIFs – Another Chicago Example
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Acknowledgements All praise to the pioneers! • • •
Jacqueline Levy, leader of the Neighborhood Capital Budget Group who produced the “TIF Almanac” and “Chicago TIF Encyclopedia” from 1999 and their “TIF Almanac” from 2003. Cook Cook County Commissioner Mike Quigley (now Congressman from Illinois’ 5th District) and his then lead author Jason Liechty for their 2007 study “A Tale of Two Cities.” A special tip of the civic hat to ace political reporters Ben Joravsky and Mick Dumke for their extensive writing on TIFs over the years for The Chicago Reader1.
Get these documents and other studies looking at TIFs at the book website at https://abolishtifsbook.com/the-pioneers. Access to the content on the website is free but requires registration.
1. Introduction – Why This Book? Originally created to provide funding for building for-profit projects in neighborhoods where development is stalled by lack of infrastructure and investors are unwillng to take a risk in a poorer community, Tax Increment Financing (TIF) has metastasized, creatng an entire industry of consultants, special interest law firms, and hungry developers eager to build their projects and grow their fortunes with public money. Now, across 49 states (only Arizona forbids them) and thousands of municipalities, local mayors turn to this fifty-year-old piece of civic programming when they seek to do economic development or local infrastructure planning. TIFs are used to subsidize private development – private construction – private projects like malls, retail, and housing – in the name of public good. Local developers petition local officials for money through this program to build projects they claim will enhance the local economy. Often these projects appear suddenly on local civic radar and usually involve a lot of public money. Local people – they might be organizers, they might be curious onlookers, they might be concerned parents of kids in the local public schools – try to get the details of these projects and are stonewalled and sometimes even thrown out of public meetings. This book is for them. There is no place in the country that provides information on TIFs to the average citizen. So, citizens from 11 states have reached out to us to learn about TIFs. This is a book about Tax Increment Financing Districts – TIFs. What are they? How do they work? What do they do for or to our communities? How big a deal are they in your state and across America? How are they connected to the larger picture of social justice and grassroots community development? Who wins and who loses when a TIF is created in your neighborhood? This book is for you if you ever tried to find out the real story behind local civic headlines – especially if public money is on the table and you want to know why and how your public dollars are being spent.
1
See The Chicago Reader TIF Archive at https://chicagoreader.com/news/the-chicago-reader-tif-archive.
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2. How Do We Know About This Subject? Answer: the TIF Illumination Project Chicago has been using Tax Increment Financing Districts (TIFs) since 1985. The city has created a total of 186 TIF districts2 in that time and over 30% of all city land has been placed in a TIF district. No other city in America – certainly no major metropolitan city – has anything like this abundance of TIF districts. This has profound implications for our finances, planning, and operations of local good government. The TIF Illumination Project has been researching the hyper-local impacts of TIFs on communtiies since 2013. The TIF project uses data mining, investigatory reporting, graphic design, and popular education methods to get and communicate data and insights. This work has triggered over 235 public meetings across the Midwest and over 50 open enrollment civic workshops. This work reveals the full history of any TIFs in the community where we have been invited to visit or “Illuminate.” Over 300,000 people have viewed presentations connected to this work. See www.slideshare.net/tomtee. Groups from 25 cities have asked for help in investigating and organizing around TIF projects in their communities. See www./tifreports.com/tif-organizing-services. When we Illuminate the TIFs of a community we reveal – often for the first time – the following information: • • • • • •
How many TIFs are in the community, where are they, how long have they been there How many property tax dollars the TIFs removed have from public use in the latest year, and since they were created How much the TIF spent and on what How much money was opaquely moved from the TIF or into the TIF If the TIF is holding debt and, if so, how much was paid in finance fees And – the most important piece of data we report – how much money (property taxes) was left in the TIF or TIFs at the end of the last reporting year
Over 16,000 people have been Illuminated in this way, and no one in those meetings had known ANY of this data beforehand. The single biggest “gasp” from attendees is when it is revealed how much money is sitting in TIF accounts at the end of the year. 3. How To Use This Book The principles and lessons laid out in this book are applicable to every jurisdiction where TIFs are being used. However, much of the data and many of the stories are based on Chicago, where TIFS has proliferated dramatically and where the TIF Illumination Project has been reporting over the last 13 years. We have put the details of many of these stories at the end of the book, for those eager to learn the gory details of how one municipality has used TIFs to consolidate power, reward allies, and renovate large sections of the central city and financial district, ignoring communities more in need of development help.
2
Research by the TIF Illumination Project, www.tifreports.com.
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This book is designed to be used with a companion website at www.abolishtifsbook.com. There you will find resources, references, reports, and other materials that line up with the chapters of this book. Access to that website is free but will require you to register.
4. What is a TIF? Tax Increment Financing Districts are creatures of local government. For the most part, they are special districts established by a local municipality under state law. Their stated purpose is to trigger or accelerate economic development in areas abandoned by the market. They give public dollars to private projects that would not happen without the public subsidy. This is a one-way process. TIF subsidies are not loans. When a municipality gifts public money to a private developer the unit of government gets no equity position in the project. When the subsidized project is sold, the developer keeps the public dollars as part of their profit-taking. In addition, in many cases, when a TIF district is created to subsidize a private development the municipality takes out a loan or note to get the subsidy started. This is debt that is hidden from view and hard to track. If a TIF subsidized project fails and the project is abandoned or sold by the original developer at a loss, the city who runs the TIF is on the hook for any debt – meaning that the taxpayers end up with that responsibility. TIFs were originally created to help underdeveloped communities by subsidizing the completion of a private development to create jobs and other economic benefits and produce new property tax (and sales tax) revenues where there were none (or very little) beforehand. The authorizing statute describes such communities as “blighted.” That is: a community or part of a city is blighted when there are empty store fronts, decayed infrastructure, poverty, building code violations, vacant lots, and other civic negatives (high crime, unemployment, etc.) But blighted is a charged term. Shelterforce -- a 50-year-old award-winning, independent newsroom that uses the power of journalism to inspire, inform, and hold accountable all those working toward more just, equitable, and thriving communities -- addresses the term in their August 23, 2017 issue. In a piece in their long-running series called “The Answer” they asked: “Is it time to bury racially loaded planning and development terms?” The answer was a loud “Yes!” and they described “blight” like this: A facially neutral term infused with racial and ethnic prejudice. While it purportedly assessed the state of urban infrastructure, ‘blight’ was often used to describe the negative impact of certain residents on city neighborhoods,” according to Wendell Pritchett in “The Public Menace of Blight.” See also City-Lab’s “The Meaning of Blight,” found at www.bit.ly/2trgqWJ. Instead say what you actually mean—high levels of vacancy, crime, substandard housing (and make sure you aren’t making assumptions about those things based on residents’ race).3 Regardless of the history of that term and how our cities evolved over time, that is the term we find in the TIF legislation.
3
“The Answer: Is it time to bury racially loaded planning and development terms?”, Shelterforce, August 23, 2017, https://shelterforce.org/2017/08/23/q-is-it-time-to-bury-racially-loaded-planning-and-development-terms.
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TIFs came to Illinois in 1977 and the statute (Chapter 65 Municipalities) that creates them sets out a menu of conditions that, if present in a certain number, prove the presence of “blight.” These conditions include: • • • • • • • • •
Dilapidation of properties in the proposed district Obsolescence and disuse Deterioration Building code violations Excessive vacancies Inadequate utilities Overcrowding Deleterious land use Lack of community planning
The other requirement for TIFs is the “but for” requirement – the seeker of TIF funds must demonstrate that the conventional source of development funding is not available for the proposed project. In other words, the market has fled the area of the proposed project – presumably because it is “blighted”, the infrastructure is insufficient to support the development of the project, and the commercial enterprise planned for the development will fail without municipal subsidy. In practice, both of these requirements are flimsy and so elastic as to allow any place to be TIFed. How are these factors measured and proven? The municipality seeking to create a TIF usually hires a specialized consultant to do the required surveys to prove conditions of “blight” and satisfy the “but for” provision. In Chicago, a frequently used service is SB Friedman, In particular, our firm has core expertise in the use of tax increment financing (TIF) to facilitate high-quality development, redevelopment and infrastructure projects. We have been a member of the Illinois Tax Increment Association (ITIA) for over 10 years and have senior personnel serving as national TIF curriculum advisor and instructor for the Council of Development Finance Agencies (CDFA), as well as lead editor of its 2009 ‘Advanced Tax Increment Finance Reference Guide.’ Since the conception of our firm, we have advised both public and private sector clients on TIF issues, ranging from conducting eligibility studies to providing support in the TIF application and negotiation process4 It is interesting to note that the founder, Stephen B. Friedman is “a director and member of the Executive Committee of The Civic Federation, a board member of Family Focus and chair of its real estate committee, and has been a member of the University of Illinois at Chicago College of Urban Planning and Public Affairs Dean’s Council.“ I think it is safe to say that Mr. Friedman and his firm is part of a well-established and deeply powerful TIF-Industrial Complex that includes banks, construction companies, academics, planners, elected officials, and – of course – developers. We will see in Sections 8.5.1 and 8.5.2 that the requirements for proving “blight” and satisfying the “but for” clause are so elastic as to be meaningless. Under existing law virtually any place or property can be made “TIF-able.” Including the most prosperous parts of your city or town. City officials and developers usually promise the project will result in more jobs, increased business development, or real estate activity at the neighborhood level beyond what would have occurred
4
SB Friedman, https://sbfriedman.com.
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without TIF. However, no municipality we know of has put in place a process to assess if any of this has happened.
5. How Do TIFs Work? TIF districts are about PROPERTY TAXES. A TIF is usually created by a municipality – usually by its economic development department. (In Chicago that is the Department of Planning and Development, which has a Commissioner appointed by the mayor.) TIFs are contained within the city or town’s borders and do not overlap into nearby municipalities. Once a TIF is created, the city must identify all the properties located within the TIF district (usually provided by the County Clerk) and is told how much property tax those properties have generated in the most recent year. That number is referred to as the Base. In Illinois, as in many states, TIFs last for 23 years (but can be renewed for an additional 12 years). In some states, TIFs never sunset. Every year for the life of the TIF the county will tell the city how much NEW property tax revenue has been generated by ALL the properties in the TIF district in private hands. Properties owned by units of government or nonprofits are not included as they do not pay property taxes. The difference between the Base and the new revenue is the INCREMENT (hence Tax Increment Financing District). This process is illustrated by the famous “triangle graphic” which looks like this:
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