“Public Benefits Clauses” A symptom of a bigger problem

If you’re the kind of policy wonk who thinks of evidence of corruption in Chicago as an early Christmas present, Tax Increment Financing is the gift that keeps on giving.  

On Monday, Chicago’s Inspector General, Joe Ferguson, issued a report indicating that problems with tax increment financing are just as bad as ever. 

“Public benefits clauses” direct developers to give a portion of the money they receive from the city to a charity chosen by city officials and other well connected individuals. This program cost taxpayers 3.7 million between 2000 and 2009. Since then, new policies by the Emanuel administration ban such donations unless the recipient charities meet the criteria of being “integrally involved in a TIF-funded project.” The IG’s report showed, however, that $375,000 in donations had still gone unreported due to “bad record keeping”.   

Putting aside the city’s troubling inability to keep track of taxpayer money, other elements of this situation are cause for concern. The only thing keeping taxpayer money out of the hands of well-connected charities is a clause saying that these charities have to be “integrally involved” in a TIF project.  What does it even mean to be “integrally involved”?  With TIF implementation, we have seen that the term “blighted area”  can be interpreted to mean anything from “industrial waste corridor” to “an area that someone wants to develop.”  Given that history, taxpayers can only guess how many well connected charities will be considered “integrally involved” in a TIF project.  

This is just another example of the pattern that Mayor Emanuel established with the TIF Task Force.  When it comes to transparency and accountability for tax payer dollars, the city wants people to know that they are concerned and they are in office to change things.  But, when you look a little closer, these promises are seldom followed by actions.  The TIF task force recommendations still haven’t been implemented (although we hope to change that) and the city’s only response to the IG’s report here is to reassure us that “steps have been taken” to address concerns of undue influence as to where the charitable contributions go.  Given the office’s lack of progress on TIF reform, it’s tough to be totally convinced the steps will be effective.   Taxpayer dollars shouldn’t go to connected officials pet projects.  We need to see real evidence that this problem has been taken care of, not more of the same “just trust us” responses from the Mayor’s office.