Participatory budgeting could mean real TIF reform

Participatory budgeting — allowing voters to determine how public funding is allocated — has been tried in several wards for aldermanic “menu money,” which funds small-scale infrastructure projects.

Now, at the instigation of Blocks Together in West Humboldt Park, it’s about to be employed to budget TIF (tax increment financing) funds. Ald. Walter Burnett (27th Ward) has set aside $2 million from the Chicago Central Park TIF for allocation through participatory budgeting.

The process will be launched on July 1 at a community meeting at Rowe Clark Math and Science Academy, said Carolina Gaete of Blocks Together. Burnett and representatives of the city’s Department of Housing and Economic Development will be there, along with experts from the Great Cities Initiative at the University of Illinois Chicago. They’ll explain the participatory budget process and what kinds of projects are eligible for TIF funding. Then there’ll be a “brainstorming session” for residents to begin developing proposals.

Smaller community assemblies will be held through the summer, and weekly meetings will offer technical assistance to help residents hone their ideas. Blocks Together will connect residents working on proposals with organizations that have expertise in their area of interest. “If there’s a group that wants a community garden, we’ll put them in touch with an organization that knows how to make that happen,” Gaete said.

In September there will be a project expo followed by voting at schools and other neighborhood sites. Any resident of the TIF district who’s over 14 will be eligible to vote, Gaete said. The district is a specially created tax area that allows new tax dollars from development to be plowed back into the area.

“We want to engage folks in deciding how public money is being spent, and make sure it’s being reinvested in the neighborhood,” she said.

“The main goals are to increase transparency and accountability and ensure direct benefits for the community,” said Cecile Carroll of Blocks Together.

It’s an idea that could catch on — especially with next month’s property tax bills, for the first time ever, spelling out how much is being diverted into TIFs.

Homeowners may be surprised at how much of their property tax bill is diverted from schools and other taxing bodies. When County Clerk David Orr announced that tax bills will now include that information, he displayed a sample bill for a property in the 43rd and Cottage Grove TIF: 83 percent of the tax payment went to the TIF.

Expect residents to start asking where all that money is going — and who’s making the decisions about how the money is spent.

For several years, Blocks Together has been holding accountability meetings when the TIF district’s annual report was released. The benefits to the community haven’t always been clear, they’ve found.

According to the city’s report on the first 10 years of the Chicago-Central Park TIF, through 2011, the largest project financed by the TIF district was a new building for Westinghouse High School — a magnet school in East Garfield Park with limited accessibility for neighborhood students, Carroll said. The new school got $42 million, about half the total TIF funding approved for the project. Some $93 million was spent on “financing costs,” including millions ported in from adjacent TIF districts for debt service for Mayor Daley’s Modern Schools Across Chicago program.

Less than $4 million total was spent on two affordable housing projects and on repairs to single-family homes; $368,000 went to small business improvement grants, and $366,818 went to street repairs.

Meanwhile, though $1.3 million was budgeted for job training through 2011, none of it was disbursed; $1.3 million was also budgeted for child care projects, and again, none of it was spent.

As of the most recent annual report, the TIF district has a fund balance of $68 million. Annual revenues are steadily growing; in 2012, the district took in $5.7 million. The TIF is slated to run through 2026.

So $2 million set aside for participatory budgeting could be viewed as a good start. If the process is successful, there is plenty of room for growth.

If you’re a homeowner in a TIF district, you may find yourself suddenly interested in the possibility of participatory budgeting next month, when you find out how much of your tax bill is being diverted to the TIF.

If so, you’re in luck. Working with Blocks Together, the Great Cities Institute is currently developing a Participatory Budgeting TIF Toolkit.

 

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