FOR RELEASE:
November 29, 2023
PRESS CONTACT:
Deanna Shoss, Communications, 773-478-8417
The City of Chicago Office of Inspector General (OIG) has released a follow-up to its 2022 audit of the City’s compliance with its Tax Increment Financing (TIF) Sunshine Ordinance and TIF Surplus Executive Order. Each year, the City’s TIF program sets aside hundreds of millions of dollars in property taxes to fund economic development in underinvested areas across Chicago. Broken into geographic districts, TIF projects can range in scope from improvements to streets and buildings to major infrastructure expansion. The 2022 audit and subsequent follow-up aim to inform the public and policymakers about the City’s fulfillment of its commitments to greater transparency and economy in the administration of the TIF program.
The Department of Planning and Development (DPD) oversees the TIF program, with the TIF Investment Committee reviewing project requests. To enhance transparency, the TIF Sunshine Ordinance was enacted in 2009, mandating the public release of specific TIF data. In 2013, then-Mayor Rahm Emanuel issued Executive Order 2013-3 to declare TIF surpluses regularly, preventing the accumulation of funds for unidentified future projects. OIG’s 2022 audit evaluated the City’s compliance with these two components: the TIF Sunshine Ordinance, which requires certain decision-making documents to be made public; and the TIF Surplus Executive Order, which (with a few exceptions) requires at least 25% of uncommitted TIF funds (“surplus”) to be returned to taxing bodies that had submitted funds including the general revenue stream for other uses.
Regarding the Sunshine Act, DPD has taken almost all of the corrective actions to which it committed in response to OIG’s original audit recommendations. Materials required by the TIF Sunshine Ordinance are now consolidated on a public-facing portal that receives nightly updates from DPD’s new project-management software. DPD has also created policies and staff training materials that emphasize the importance of Sunshine disclosures. DPD still needs to remove legacy pages from its website, however.
Regarding the Surplus Executive Order, the City’s Office of Budget and Management (OBM) has developed project categorization guidelines to better define which expenses constitute project commitments. Further, while OBM identified existing budget documents that describe the City’s TIF surplus methodology and the amount of surplus by district, it has not developed or released an annual report specifically on TIF surplus; OBM committed to developing such a report in both its response to the original audit and its response to the follow-up inquiry and acknowledged that “additional work” needs to be done to collaborate effectively with other agencies.
“As Chicago strives for transparency and accountability around the use of TIFs, our follow-up report underscores both commendable progress and opportunities for further improvement,” says Deborah Witzburg, Inspector General for the City of Chicago. “We encourage the City to complete the work to which it has committed in ensuring that TIFs are operated and administered in a transparent manner—with the management of City resources in the light of day.”
Read the Report
Read the full report, released on November 29, 2023, here.
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The mission of the independent and nonpartisan 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 inquiries into most aspects of City government.
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