Capitol Fax.com - Your Illinois News Radar

Today’s must-read: Millions in misspent TIF dollars

Posted in:

Illinois

* Drew Zimmerman at the Northwest Herald…

Under TIF, property taxes in a defined geographic area are collected and, over time, as property values rise, the increased tax revenue which would have been collected normally, goes into an incentive pool to grow and be used for specific projects. Traditionally, TIF incentive pool funds go to development or other projects designed to improve buildings or areas within the TIF-defined region which are deemed ‘blighted’ by the TIF Act.

However, many municipalities use the tax dollars to augment their budgets, utilizing the money to pay for administrative and police salaries. Meanwhile, millions more are spent with no officially reported purpose at all, a Shaw Media review of tax increment financing records over the last 10 years has found.

The selective reporting requirements of the Illinois Comptroller’s Office make it nearly impossible to track these expenditures at best, and at worst may be helping to mask millions in misspending. […]

But an in-depth look into the financial reporting within a dozen counties in and around the Chicago area shows numerous other municipalities reporting their spending in a similar fashion to DeKalb and University Park without identifying how they are spending TIF funds – and whether those expenses are TIF-eligible.

For some municipalities such as Kirkland in DeKalb County and Geneva in Kane County, this amounted to hundreds of thousands of dollars in administrative expenses being covered by TIF. But for others, such as East Dundee in Kane County and West Chicago in DuPage County, millions have been allocated to staff salaries.

An analysis of tax increment financing reports filed with the Illinois Comptroller since the 2010 fiscal year identified roughly $10.3 million in unspecified administrative expenses, over $17 million in undisclosed fund transfers and $6 million in completely unidentified expenditures – primarily from University Park. Given the distribution of the Illinois property tax burden, the bulk of those funds would have gone to support public schools.

Go read the rest.

posted by Rich Miller
Tuesday, Oct 10, 23 @ 10:18 am

Comments

Northwest Herald is the last good paper in the Shar Media group. They consistently have stories which do the work of getting to the details. Like this one.

TIF reform at the state level is long, long overdue.

Comment by TheInvisibleMan Tuesday, Oct 10, 23 @ 10:23 am
Paging Senator Gillespie…

Comment by Panther Pride Tuesday, Oct 10, 23 @ 10:40 am
A 3.5 year old article?

Comment by Smalls Tuesday, Oct 10, 23 @ 10:49 am
Another Illinois law with no teeth and practically no meaningful oversight possible without changing the law. We need a Dept. of Local Gov’t Finance like Indiana has to identify where all this money is going, as well as laws requiring detailed accounting of TIF money.

Comment by thisjustinagain Tuesday, Oct 10, 23 @ 11:10 am
Anna’s city council fell for the old TIF scam three years back. After gerrymandering the district in order to qualify, haven’t seen one thing developed.

They’ll tell you it takes five to ten years to see development. I’ve got nothing but time.

Comment by Flyin'Elvis'-Utah Chapter Tuesday, Oct 10, 23 @ 11:14 am
I could see using funds for Police salaries if the police are dedicated to the TIF area and it has a higher than average crime rate in the area since high crime rates can discourage investment. Ditto a salary for an office worker if her job is to get businesses to locate to the TIF area or to be a point of contact for businesses in the TIF area to coordinate streets & san, police, etc for the area.
But those types of salaries that are tied to the TIF area don’t seem to be what is happening here. Did the local governments not understand the state law or simply figure no one would ever look?

Comment by cermak_rd Tuesday, Oct 10, 23 @ 11:24 am
TIF is a massive scam and a cottage industry for a small group of lawyers that sell the same snake oil, especially to rural communities that generally have no real hope of actual economic development. Instead they hurt local schools by cutting off increases in revenue that then get spread out to other taxpayers.

In no way am I surprised to hear that the funds are nmiss used. The story isn’t likely to even be the tip of the tip of the iceberg.

Comment by JS Mill Tuesday, Oct 10, 23 @ 11:56 am
Yeah, the school district had a particularly sharp attorney at the time and they decided to make noise. Eventually this led to the state’s attorney advocating — and getting — a forensic audit of DeKalb’s largest TIF fund. They found plenty, including everybody and their brother designated as TIF administrators so the city could draw TIF money to pay portions of their salaries. Auditors also found out that TIF development contracts weren’t worth the paper they were printed on, because DeKalb pays out without following up, never checking the work or asking for receipts.

Comment by yinn Tuesday, Oct 10, 23 @ 12:13 pm
== Did the local governments not understand the state law or simply figure no one would ever look? ==

The law is somewhat vague, and decisions about who gets paid by TIF and how much is accounted for on a budget worksheet that never sees the light of day unless you know to FOIA it.

Comment by yinn Tuesday, Oct 10, 23 @ 12:21 pm
I don’t know too much about TIFs, but the process seems like it really needs to be amended at the state level.

In Sugar Grove, they are trying to create a TIF for the land surrounding the intersection of 88 and 47 - land which is in no way “blighted,” just not developed. And the TIF is for the wealthy owners of this land, who are trying to build warehousing and industry there that a large number of vocal locals do not want.

Comment by Techie Tuesday, Oct 10, 23 @ 12:24 pm
“for an office worker if her job is to get businesses to locate to the TIF area”

The current TIF law allows for exactly that. However, creation of such a position has to be identified in the development plan within the district.

The problem is even though the TIF law allows for this, it requires a paper trail from the municipality to prove what is being claimed, is actually being done by the person being paid.

I’m sure you can see why many municipalities skip that step and just take/transfer the money instead. Especially seeing as there appear to be no consequence for doing so.

Comment by TheInvisibleMan Tuesday, Oct 10, 23 @ 12:28 pm
Why are we recycling an article from 2020 and why is it a must-read now?

Comment by Anon Tuesday, Oct 10, 23 @ 1:34 pm
“… as well as laws requiring detailed accounting of TIF money.”

This is something the academic accountants at GASB should be working on, rather than the obscure navel gazing they usually engage in.

Comment by Anyone Remember Tuesday, Oct 10, 23 @ 1:59 pm
@Rich - want to fill us in why a 3 year old article is a must read?

Comment by ExplainYourself Tuesday, Oct 10, 23 @ 2:35 pm
===why a 3 year old article is a must read? ===

Came up on one of my feeds. I read it, thought it was outstanding, and didn’t notice the date. Wanna tell me why a 3 year old article with lots of solid info shouldn’t be a must read?

Comment by Rich Miller Tuesday, Oct 10, 23 @ 2:37 pm