Follow-up to the City’s Compliance with the TIF Sunshine Ordinance and TIF Surplus Executive Order

Executive Summary

TIF is the City of Chicago’s primary funding vehicle for economic development. The Department of Planning and Development (DPD) administers the City’s TIF program. TIF uses local property taxes to finance public and private projects designed to reduce urban blight by improving infrastructure, expanding the tax base, and/or fostering economic development. The TIF Investment Committee reviews public and private projects requesting TIF support based on details collected by DPD.

TIF Sunshine Ordinance: To increase TIF transparency, City Council passed the TIF Sunshine Ordinance in 2009.4 This legislation requires the City to post certain data publicly. In 2013, the ordinance was amended to specifically require that the Chicago Data Portal provide a searchable database of TIF-funded projects.

TIF Surplus Executive Order: As used in the context of the City’s TIF program, the term “surplus” means unused funds subject to being released to the City and overlapping taxing bodies. In 2013, Mayor Rahm Emanuel issued Executive Order 2013-3, “Declaration of TIF Surplus Funds in TIF Eligible Areas,” which required the City to declare, on a regular basis, surpluses in TIF district accounts. The Order aimed to end the annual practice of holding over most or all funds for unidentified future projects. The Order requires all TIF districts to declare 25% of all “TIF funds anticipated for future use” as a surplus, unless the district is less than three years old, has less than $1 million in account balance, was created for a single project, or has helped fund Modern Schools Across Chicago projects. The Order allows a district to consider future planned expenses, revenue volatilities, tax collection losses, and similar contingencies before calculating its surplus, but substantially limits its discretion to hold back unallocated funds because State law requires municipalities to return TIF surpluses to the entities that would otherwise have received that property tax revenue.