Orr pushes Chicago to tap special tax dollars for schools

July 11, 2013

Cook County Clerk David Orr is joining the chorus of public officials calling on Chicago politicians to tap money from controversial special taxing funds to help shore up the city’s struggling public schools.

Orr said Thursday that Chicago’s 154 tax increment financing districts - or TIFs - contain untold millions of dollars that could help close Chicago Public School’s estimated $1 billion budget gap for the next school year.

“The ideal would be - is, before we open the schools, that some of these things could be resolved,” Orr said at a press conference Thursday. “I’m not sure they can do it. I’m glad some of the aldermen called for this, but the sooner they declare a surplus, the sooner that money could be distributed.”

Orr didn’t say exactly how much unused TIF money he thought should flow back into the city’s school district, but suggested it should be “much more” than the $10.5 million that CPS got during the last calendar year.

The Democratic clerk is hardly the first person to call for TIF money to help Chicago’s schools. Several Chicago politicians recently urged Mayor Rahm Emanuel and aldermen to declare a so-called TIF surplus to benefit the school system, and the Chicago Teachers Union and advocates have been asking that for years.

Chicago’s TIF districts generated $457 million in revenue during 2012, up slightly from the year before, according to an annual report Orr released Thursday. In a TIF, any property tax revenue generated from an increase in property values is funneled into a special fund reserved for economic development projects in the district.

But that also means tax dollars are being diverted away from local governments and school districts. And at a time when Emanuel’s administration is in the midst of the largest round of school closures in American history- in part, it maintains, to save money - many have called on City Hall to distribute surplus TIF dollars that aren’t already earmarked for specific projects.

Declaring a TIF surplus would require approval by Chicago’s City Council. Emanuel’s administration said Thursday that CPS will already be getting $18 million in TIF money over the next school year.

Right now, his administration estimates there is $80 million to $100 million in unallocated Chicago TIF money. But the city would likely tap only about a fifth of that if it declared a surplus, in order to leave cash for other projects or unexpected revenue shortfalls, according to a top Emanuel budget aide. That would ultimately leave just about $8 million to $10 million for Chicago Public Schools.

Emanuel helped balance this year’s budget with $25 million in surplus TIF money, and mayoral spokeswoman Kathleen Strand said Emanuel likely tap some special taxing funds again this year.

“But, let's be clear, any amount of surplus available would be a drop in the bucket compared to the $1 billion structural gap CPS is facing,” Strand said. “We need pension reform now or further cuts will be unavoidable and fall on the doorsteps of our classrooms."

Chicago Public Schools estimates its teacher pension costs will explode by upwards of $400 million next year, after state lawmakers refused to give the district another break from paying into the retirement fund. Some schools have already reported steep budget cuts, though CPS has not yet released its budget for next year.

But however modest, Orr still said a TIF surplus could provide some respite for city schools.

“How do you explain to the kids in many of these schools that gym, music, art, other kinds of things, are cancelled, while profitable businesses...downtown receive $25, $30, $40, $50 million, whatever, to help their development?”

Alex Keefe covers politics for WBEZ. Follow him @akeefe.