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Responsible Budget Ordinance
Whereas, Tax increment financing (TIF) is a tool intended by state law to encourage economic development by providing public support to encourage investment in targeted areas that meet certain conditions of blight, decay or underperformance; and
Whereas, Tax increment financing is not an end in itself, but a crucial tool for supporting quality businesses, creating more jobs and building strong neighborhoods; and
Whereas, the City of Chicago’s neighborhoods are currently suffering from the economic recession; and
Whereas, in light of the current economic circumstances, a short-term infusion of funds back into the neighborhoods could provide a great benefit, helping achieve the ultimate goal of supporting strong neighborhoods; and
Whereas, every tax dollar released back to our neighborhoods this year is a dollar that could go a long way to ensuring the ongoing viability of critical services, such as schools, parks, and libraries; and
Whereas, even in these tough economic times, TIF districts throughout the City collected $469.9 million in property taxes in 2010; and
Whereas, multiple TIF Districts have surplus funds not required, pledged, earmarked, or otherwise designated for payment and securing of the obligations and anticipated redevelopment project costs; and
Whereas, 65 ILCS 5/11-74.4-7 requires that any monies held by a municipality and not required for the payment and securing of obligations of a tax increment financing district and/or redevelopment project costs shall be deemed to be “Surplus Funds”; and
Whereas, in the current economy, these Surplus Funds afford a means to meet basic needs throughout the City; and
Whereas, last year, pursuant to this statute, Mayor Daley declared a surplus, returning $187million of funds levied from TIF districts; and
Whereas, in light of current needs, all those who live and work in the City would benefit from the redistribution of roughly half of these surplus funds back to the municipality, schools, parks, and other taxing entities;
Therefore, be it ordained, that:
SECTION 1. Recitals. The above recitals are incorporated herein and made a part hereof.
SECTION 2. This section shall apply only to City TIF districts with 2011 fund balances exceeding $5 million. For such TIF districts, the total revenues that are not already required, pledged, earmarked, or otherwise designated for payment of or securing of obligations at the close of this fiscal year shall be calculated. Fifty percent of this cumulative total shall be designated, declared, and distributed as Surplus Funds.
SECTION 3. As provided by 65 ILCS 5/11-74.4-7, within 180 days after the close of the City’s fiscal year 2011, Surplus Funds shall be distributed to the municipality and returned to the affected taxing districts, such as the school district and park district, to pay for necessary services.