OIG Inquiry Finds That the City Has Not Fully Implemented Several Recommendations for Improving Transparency, Accountability, and Efficiency in Chicago’s TIF Program

The City of Chicago Office of Inspector General (OIG) has completed an inquiry into the City’s implementation of recommendations issued in 2011 by the Tax Increment Financing (TIF) Reform Panel. OIG found that the City only partially implemented the Panel’s recommendations and urges the new administration to revisit the recommendations that were not fully implemented by the outgoing administration.

Recommendations still left unaddressed, include:

  • The City’s economic development plan lacks local development goals, objectives, and milestones, limiting its use as an effective guide for TIF decision-making.
  • The City’s Capital Improvement Program does not comprehensively detail funding of City infrastructure needs nor satisfy best practices, making it insufficient for allocating TIF resources.
  • Many TIF metrics are not available online, not user-friendly, difficult to access, or simply outdated.
  • The City does not publish thorough justifications to support the conclusion that private development would not occur without TIF funding.
  • The City has not established performance thresholds needed for strategic review across TIFs and subsequent accountability, including consequences for not meeting standards.
  • The City’s internal TIF oversight body does not have any documented responsibilities, leadership, authority, or accountability.

TIF is a tool designed to eradicate blight, improve infrastructure, and foster economic development, which can also serve as an important mechanism for promoting equitable development of affordable housing, expanding the City’s job base, and putting vacant land to productive use. Unfortunately, this potentially important redevelopment tool is as often regarded as an engine for perpetuating inequity as it is for eradicating it,” said Inspector General Joe Ferguson. “Former Mayor Emanuel created the TIF Reform Panel in response to both the historical realities and deeply entrenched perceptions of TIF. He is to be commended for having done so and for then committing the City to implementing reforms consonant with the Panel’s recommendations. However, OIG’s inquiry into the state of the City’s delivery on the committed reforms reflects there remains much to do. It is critical that TIF usage is regularly evaluated, justified, and held accountable. If it is to be regarded as effective and legitimate, there must be clear, enforced standards, criteria, and performance metrics that are publicly transparent. With a number of considerable, highly controversial TIF projects on the drawing board, we strongly urge the incoming administration to move swiftly to ensure the TIF Reform Panel’s recommendations are fully implemented.”

The full report can be found online.

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The mission of the independent and non-partisan City of Chicago Office of Inspector General (OIG) is to promote economy, effectiveness, efficiency, and integrity by identifying corruption, waste, and mismanagement in City government. OIG is a watchdog for the taxpayers of the City and has jurisdiction to conduct investigations and audits into most aspects of City government. If you see corruption, fraud, or waste of any kind, we need to hear from you. For more information, visit our website at: www.igchicago.org.