School Districts Versus Cities On TIF Policy | Progress Illinois

How will Chicago Public Schools close the daunting $700 million budget shortfall projected for next school year?

Resolution of the budget crisis in Springfield certainly would help; state government owes CPS a total of $370 million for the last and current school year. Another source of dollars administrators could seek to tap: the city's tax increment financing (TIF) districts. Recall that CPS will gain around $90 million out of the $180 million in TIF funds that lame duck Chicago Mayor Richard Daley is proposing to use as surplus in his FY 2011 budget. CPS is getting a fraction of what it could, however. Even after this year's surplus declaration, an estimated $520 million in TIF reserves will remain untouched.

It would be rational for top leaders at CPS and members of the Board of Education to pound the table and demand property taxes stashed away in TIF accounts. The Board of Education has the most to lose by the proliferation of TIF districts in Chicago, which freeze the amount of property taxes the board can cull from those districts. Elsewhere, school districts often serve as a check on municipal governments' appetite for tax increment financing. Not so in Chicago. UIC professor Rachel Weber talked about this dynamic at a TIF panel discussion earlier this fall. Here's a clip:

A variation of this fight is happening out in Oak Park. The situation has its own specific history and legal background but it does provide a recent example of a school district pushing back against a municipality's TIF policy. Leaders of Oak Park-River Forest High School sued the Village of Oak Park earlier this year for allegedly violating an earlier deal that allowed the village's downtown TIF to be extended an additional 12 years. In exchange, the Wednesday Journal reported this spring, "village hall was to 'carve out' properties in Oak Park's downtown tax increment financing district ... and funnel money back to other taxing bodies. But that hasn't been done, the high school alleges." Maybe it's time for the Board of Education and CPS to have a chat with their counterparts out in Oak Park ...

via progressillinois.com

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