The newly released Chicago Inspector General report, "Review of TIF Public Benefits Clauses and Charitable Donations," is another example of why we need more transparency of tax increment financing in Chicago.
The report finds that through the "public benefits clause" in a lot of TIF redevelopment agreements, the recipient of the subsidy is obligated to make a contribution to specific charities or public programs. The City chooses which non-profits or public programs receive the subsidy. But according to the Inspector General, there is no identifiable criteria or process for choosing the non-profits that recieve this benefit.
Here is an excerpt from the IG's release: "The review found a significant lack of transparency and accountability in the City’s process of choosing specific non-profit organizations for inclusion in public benefits clauses. The IGO’s review also established that among all recipients, both public and private, a single private non-profit organization was second only to the City itself in the number of mentions. In fact, that organization, After School Matters (or its KidStart Program), was named as a recipient in 59% of the agreements directing contributions to private non-profits." [emphasis added] Oh, and in case you didn't know, After School Matters is a charity run by former first lady of Chicago, Maggie Daley.
This is an EXCELLENT example of the lack of transparency and accountability that exists with tax increment financing in Chicago. Even though this is not specifically about how tax dollars are being spent, taxpayers have the right to know if and how the benefits of TIFs are leveraged for political or financial gain and who is benefiting.
Once again, if the people of Chicago cannot follow the trail of money, know how their tax money is being spent, or even if it provides a "public benefit" or not, the system is too easily corruptible.
Chicago Inspector General Joe Ferguson, said it best:
“This is a specific example of the lack of transparency, accountability, and ownership the Mayor’s Task Force on TIF Reform discussed earlier this summer,” said Inspector General Joe Ferguson. “When the public can’t see how their money is used to leverage benefits for private entities, we have a transparency issue. When the IGO can’t get an answer to how those private entities are chosen, we have an accountability issue. When the City’s administrators aren’t able to explain the final outcomes, we all have cause for concern.”
Read the full Inspector General's report here.