Daily file illustration by Meher Yeda
Opponents of the proposed 5th Ward Tax Increment Financing district demanded Wednesday that City Council vote down the TIF at its upcoming meeting.
When a TIF proposal is enacted, the existing property tax rate becomes the ceiling for how much the city can collect from property taxes. TIF districts last for 23 years, and tax rates rise when development happens. But instead of going directly to the city, that excess tax revenue goes toward public works or economic development in the area. Only city staffers and selected developers can allocate the funding toward new projects.
During the virtual event, which drew about 40 attendees, residents said TIF districts could spur gentrification. Guest experts added that TIF funds could be used to divert pockets of funding into non-regulated pools within the city’s financial reserves.
The proposed district would be generally bound by the canal near Leonard Place to the north, Dewey Avenue to the west, Emerson Street to the south and Ridge Avenue to the east. The region primarily encompasses the historically Black 5th Ward and includes commercial corridors as well as residential neighborhoods.
City Council was poised to vote on the TIF, which will be the city’s fifth TIF district, at its Sept. 13 meeting. Councilmembers delayed the vote after members of the Evanston/Skokie School District 65 school board spoke at last week’s council meeting in opposition to the TIF proposal’s language.
Wednesday’s Zoom was primarily organized by former mayoral candidate Sebastian Nalls, former aldermanic candidate Mary Rosinski and former teacher Trisha Connolly. They were joined by TIF expert Tom Tresser of Civic Lab, a nonprofit organization focused on civic engagement and education.
Illinois law states cities need to demonstrate at least five of 13 indicators of “blight” in an area to qualify for a TIF.
“There’s a lot of value judgments attached to this term,” Tresser said.
“Blight” is a loaded word that creates a derogatory image of areas meeting multiple indicators, Tresser said. It’s also vague enough to sometimes justify improvement projects in comparatively wealthy suburbs, he added.
While TIF funds are not a loan, they are also not controlled by taxpayers. Instead, they’re allocated to different projects by city staffers and selected developers. TIFs can only be used to build new infrastructure, not to hire employees, which Tresser said can limit them as efficient solutions to the civic improvements actually desired by TIF district residents.
“TIFs are racist,” Tresser said. “(TIF laws cannot) be reformed or used for the common good. When you put a TIF on a community and say to that community, ‘That’s the answer to your neglect and to your lows,’ you’re basically saying, ‘It’s on you to let your own self up.’”
Former Chicago mayoral candidate Paul Vallas also joined the call to express his concerns about how TIFs can be used to create off-the-books funds for local governments.
When a TIF district is established, the total amount of property taxes collected by every building in the district is labeled as a “base” number. Every year, the total amount of property taxes is counted again, and any money over the base amount goes into the TIF’s fund for civic projects. Meanwhile, the “base” amount goes back to the city, which continues to receive that fixed amount as property taxes from the area no matter how much higher or lower that number would be if the TIF was not in effect.
Vallas said he worries cities are using base money from TIF districts as a “slush fund” that the public can’t oversee. Creating more TIFs establishes non-regulated funds for city government use, he added.
“There’s this perception that TIF is taking money away from local government,” Vallas said. “It’s not. It’s a backdoor way to raise taxes.”
Rosinski, along with civil rights activist Bennett Johnson, wrote to The Daily that the 5/5 TIF proposal ignored the genuine concerns of 5th Ward residents — none of whom spoke in favor of the proposal at a recent ward meeting led by Ald. Bobby Burns (5th). Some residents expressed worry in Wednesday’s meeting that TIF-sponsored construction projects will price Black homeowners in the 5th Ward out of the neighborhood through higher property taxes, causing gentrification.
Reparations Committee member and landlord Carlis Sutton said the projects created by TIFs would not directly benefit residents for decades, and that property tax increases caused by TIFs would have an immediate detrimental effect.
“It will take 20 to 30 years for people to benefit from this TIF. There is no benefit to me, as a Black taxpayer from the 5th Ward,” Sutton said. “There has been no foresight. There has been no kind of collaboration with the community on this particular TIF.”
Residents disagreed over the potential sale of the Lorraine H. Morton Civic Center, which is allocated within the 5/5 TIF under the current proposal. Selling the Civic Center would raise significant revenue if sold while the 5/5 TIF was in effect.
Former 8th Ward councilmember Ann Rainey said TIFs specifically benefit residents in mostly residential areas. They could gain from taxes associated with commercial and municipal sales in the area, as would occur with the Civic Center, she said.
Rosinski argued that this type of major municipal sale can still benefit residents without TIFs. She argued alongside Johnson in favor of funding programs with more community oversight.
“TIFs can be a positive thing,” Bennett said. “I don’t agree that just because it’s a TIF, it’s bad. But it has to be done with community involvement and it has to be done with specific plans… in this case, it’s not being done for the people.”
City Council will conduct its final vote on the 5/5 TIF in its next meeting on Sept. 27.
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