CHICAGO (WBBM NEWSRADIO) — Officials with the Chicago Teachers Union (CTU) have said the union wants to see Tax Increment Financing (TIF) used to head off possible cuts or furloughs in Chicago Public Schools.
TIFs are often used to entice developers, pay for infrastructure around big projects and are frequent targets in calls for financial reform — most recently by former Mayor Lori Lightfoot. Now, the CTU sees them as a way out of a massive budget crunch.
Pavlyn Jankov, the union’s research director, estimated the district would get $1 billion if the city were to end TIFs that are not already legally bound to projects.
“Rather than having funds that remain in this community — in the downtown community — we could have a long-term plan to invest in our communities,” Jankov said. “In the prior administration, there were multiple TIFs that were extended for 13 years, locking up funding of hundreds of millions of dollars, so it’s critical that we fast track that.”
CTU said expiring the city’s more than 150 TIFs would make an additional $383 million available each year.
Jitu Brown, a community activist and candidate for the school board, says that money should be used to correct years of balancing the budget on the backs of students on the south and west sides.
“Small class sizes being perfectly fine for schools Ogden and Harriett Tubman … but wasteful when it comes to Austin High School, when it comes to schools like Nash [Elementary School] and Al Raby [High School.”
Mayor Brandon Johnson would not say anything negative about the CTU ideas — but told reporters that TIF money continues to help schools and things like La Salle Street redevelopment.
“What I have been very clear about is that the TIF surplus, that belongs to the particular taxing bodies … I’m still very much committed to ensuring that those surpluses reach our classrooms,” he said.
Johnson was asked if he thought TIFs would continue to play a very important role over the next four to 10 years. He said they would, and the mayor added that there are many examples of TIFs helping the areas they were meant for.
On Wednesday, Chicago City Council delayed a vote on Johnson’s refinancing plan, which his office believes will help the city address its budget shortfall.
City council members argued that the temporarily blocked bond refinancing measures — which would impact some $1.5 billion in bonds — would be bad for the city. Some, like Ald. Scott Waguespack (2nd), warned that the city’s credit ratings could suffer.
Chicago Chief Financial Officer Jill Jaworski was anxious to respond to that.
“We’ve been very concerned about a lot of the misinformation that has come out about this bond issue,” she said. “This bond issue is not adding debt to the city’s books. It is a refinancing. Every dollar of bonds we issue is going to pay off other bonds.”
Jaworski added: “We are simply taking existing bonds that have 5% and higher coupons and replacing them with bonds that, in this market, would probably yield somewhere in the 3.5% – 3.8%, so no different than when you refinance your mortgage.”
Opponents of the bond measure used a procedural move to delay the vote until the next city council meeting.
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