As CPS prepares to close a record number of schools, the fate of students and communities is in question.
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In the News: TIF funding for CPS; the year of the education documentary
By: Cassandra West / July 09, 2010
WBEZ's Hunter Clauss reports this morning on the growing number of teachers and parents who are pressuring Mayor Richard Daley and CPS CEO Ron Huberman to direct TIF funding to schools. TIFs are the city's tax increment financing districts that collect $500 million in property taxes a year. Daley has the final say in how the money is spent. But the Chicago Teacher's Union and a group of mostly North Side parents say TIFs are siphoning millions of dollars from Chicago Public Schools — money that would help balance the books.
WBEZ's Hunter Clauss reports this morning on the growing number of teachers and parents who are pressuring Mayor Richard Daley and CPS CEO Ron Huberman to direct TIF funding to schools. TIFs are the city's tax increment financing districts that collect $500 million in property taxes a year. Daley has the final say in how the money is spent. But the Chicago Teacher's Union and a group of mostly North Side parents say TIFs are siphoning millions of dollars from Chicago Public Schools — money that would help balance the books.
A suit filed Thursday charges the Chicago Board of Education owes the Chicago Teachers Pension Board $40.6 million, the Sun-Times reports.
The Tribune has a story on a Chicago nonprofit called Urban Students Empowered that finds diamonds in the rough at Chicago Public Schools and gives them the hope of a college education. But the real gems are the teachers, the story notes. According to research from the Consortium on Chicago School Research, teacher quality is the most important factor in academic success, so most of the program's resources go to finding star teachers and providing them professional development and support.
A policy brief by Kenneth J. Saltman, associate professor of Educational Policy Studies and Research at DePaul University, looks at the portfolio approach to school reform being used in an increasing number of large urban districts including New York, Chicago, New Orleans and Washington, D.C. The approach has been promoted by education reform theorists and some in the Obama administration as a vital and necessary solution to the problems, especially, of urban districts despite the fact that it has unclear advantages, no proof of past success and known high costs. (Great Lakes Center for Education Research and Practice)
In the state
The Northwest Suburban High School District 214 is talking about cutting class rank, starting with the class of 2014. The board could vote on the issue in August. (Daily Herald)
The Daily Herald also reports that a federal judge has granted Elgin Area School District U-46 extra time to prepare pretrial paperwork for a racial bias lawsuit, after its lawyers claimed they were overwhelmed with the number of documents submitted by the families suing.
In the nation
The average starting salary for 2010 college graduates dipped 1.3 percent from a year earlier, according to a survey by the National Association of Colleges and Employers released Thursday. (Sun-Times)
Detroit school officials are opening a trailblazing teacher-led school this fall that will place emphasis on enhanced instruction and curriculum. The school won't have a principal, and teachers will make all decisions on classroom needs. An executive administrator will assist teachers with enrollment and budgetary documents. (Chicago Tribune/AP)
This summer, no fewer than four new documentaries, most of them independently produced, tackle essentially the same question: Why do so many urban public schools do such a bad job — and what can be done to help kids trapped in them? (USAToday)
The monitor overseeing the court-ordered reform of Washington, D.C.'s juvenile justice agency said that the city has staged a "remarkable" turnaround in how it educates juveniles in long-term detention and had moved a step closer to ending a long-running class-action lawsuit. (The Washington Post)
In the News: TIF funding for CPS; the year of the education docu
In relation to Hunter Claus's WBEZ report "CPS Parents Hammer Daley, Huberman on Tax Increment Financing," I would very much like to see any reporter in Chicago report on this story without simply presenting the Joravsky position on TIFs contrasted to the official position of CPS and the Office of the Mayor. As I have stated several times I think that the Raise Your Hand (RYH) coalition's position, and apparently also the new CTU leadership's position, on the amount of tax dollars immediately retrievable to the CPS by a liquidation of TIFs is simplistic. I equally believe that the statements on this issue coming from Mr. Huberman and the Mayor's Office are also excessively simplistic.
Before I discuss this issue, let me say that I agree with Mr. Joravsky's critique of the questionable use of TIF dollars for projects in Chicago, i.e. for political advantage by the Mayor and aldermen. I also agree that some of the TIF districts created within Chicago are in no way blighted and in need of redevelopment. But, that unfortunately is the political reality of the situation and the citizens of Chicago have elected the current Mayor by an overwhelming majority.
As both the Mayor and Mr. Huberman have correctly stated, TIFs exist because of State law. But the state law as it currently exists is because of an extremely powerful lobbying organization called the Illinois Tax Increment Association (ITIA). Among the Board members of ITIA are Mayor Daley, Philip R. McKenna, President Kane, McKenna & Associates, lead partners of several important law firms, Mayors or village board presidents of 14 other Illinois towns, and officers from the Investment Banking sector. There is no representation of school districts on this body. [to see the complete list go to http://www.illinois-tif.com/board.asp]
The eligible uses for TIF funds are provided in Illinois’ Tax Increment Allocation Redevelopment Act (65 ILCS 5/11-74.4-1 through 11-74.4-11): the TIF Act. Simply this act authorizes that TIF funds may be used for: The administration of a TIF redevelopment project. Property acquisition. Rehabilitation or renovation of existing public or private buildings. Construction of public works or improvements. Job training. Relocation. Financing costs, including interest assistance. Studies, surveys and plans. Marketing sites within the TIF. Professional services, such as architectural, engineering, legal, and financial planning.
The ITIA explains on its website exactly how a TIF works in theory:
" When a TIF redevelopment project area (often called a TIF district) is created, the value of the property in the area is established as the “base†amount. The property taxes paid on this base amount continue to go to the various taxing bodies as they always had, with the amount of this revenue declining only if the base declines (something that the TIF is expected to keep from happening) or the tax rate goes down. It is the growth of the value of the property over the base that generates the tax increment. This increment is collected into a special fund (the Special Tax Increment Allocation Fund) for use by the municipality to make additional investments in the TIF project area. This reinvestment generates additional growth in property value, which results in even more revenue growth for reinvestment. "
It is the growth in revenue based on an increase in the value of the property over the base that CPS loses in the creation of a TIF district. According to the 2009 CPS Comprehensive Annual Financial Report (pages 120-123) there were about 160 TIF districts within the taxing area of CPS. When each of these TIF districts were created the CPS had a seat on the Joint Review Board for each of these TIF districts, there is no record of CPS objecting to the creation of any of these TIF districts. But it needs to be understood CPS does not have veto power in the Joint Review Board process. Moreover Joint Review Board decisions according to the Act "shall be an advisory, non -binding recommendation. The recommendation shall be adopted by a majority of those members present and voting. The recommendations shall be submitted to the municipality within 30 days after convening of the board."
Now, as to the question of whether CPS is a net loser on the TIF deals? As I have stated before no one, including Mr. Joravsky, nor Mr. Goldman from RYH have in anyway examined this issue. To do this the capital and public works projects developed from the revenues from all the TIFs that have benefited CPS have to be balanced against property tax revenues lost to CPS for a period of time going back to at least 1988. Unless that hard work is done, the argument is reduced to the CPS and the city pointing to improvements made to CPS via TIF revenues and the objectors to TIFs pointing calculations of lost tax dollars to CPS. I would guess CPS is a loser, but I cannot prove that.
As to the question of whether or not CPS can get out of existing TIFs, the answer is that state law as far as I can see does not provide for an individual taxing body such as CPS within a municipality to unilaterally exit a TIF and take their money. Illinois TIF law allows a TIF district to exist for a maximum of 23 years. Any TIF district may be terminated earlier if all financial obligations are paid-off and the Chicago City Council votes to terminate the district. Since 1977, when Tax Increment Financing was enacted, about 30 TIF districts in Illinois have been voluntarily terminated by their municipal sponsors. Five of these terminations that I know of were in Chicago.
So the question comes down to this, for a really big revenue TIF district that would generate a lot of money for CPS such as the LaSalle Central TIF enacted in 2004 and going on to the year 2030 how much would it cost to pay off all financial obligations of the TIF and would the City Council pick up the tab for paying off such debts in order to generate money for CPS via tax receipts?
My answer to that question is currently the City of Chicago will not eat TIF debt in order to terminate numerous TIF districts and hand money over to CPS. As I have said before, RYH and now the CTU, need to focus on realizable revenue, not liquidating existing TIFs. I also think CPS should vigorously oppose new TIFs that cost it revenue, and support TIFs where the property values are so low that the TIF maybe is the very best shot CPS has for increase revenue from that geographical area of Chicago.
The most realizable source of revenue for CPS immediately is a property tax increase.
Rod Estvan
In the News: TIF funding for CPS; the year of the education docu
TIF gone bad at 103rd-Wood, near Metra tracks. ALL abandoned, ALL ugly!
And our schools are horribly overcrowded.
In the News: TIF funding for CPS; the year of the education docu
Yesterday Crain's had an article on an attempt to expand the LaSalle Central TIF. See http://www.chicagobusiness.com/cgi-bin/news.pl?id=34671
Rod Estvan
In the News: TIF funding for CPS; the year of the education docu
Re: The Chicago Teachers Pension Fund sues CPS
The blurb in the Sun-Times--a paragraph and a sentence--concludes with "A board spokeswoman said she has not seen the suit."
Excuse me, but two of the twelve members of the CTPF Board of Trustees are appointed by the Board of Education (Alberto Carrerro and Peggy Davis). It's not as if this came the Board can honestly claim ignorance here.
Who was the spokeswoman? That lying Monique Bond?
In the News: TIF funding for CPS; the year of the education docu
Thank you, Rod, for another insightful analysis of the TIF situation.
I, too, have been uneasy about the jump-on-the-bandwagon movement to "redirect" TIF money to CPS, but just don't feel knowledgeable enough about the subject to explain why.
The 41st ward, in which I make my home, receives no TIF funds because our alderman (Doherty) is opposed to them. A tip of the hat, as it were, to him. It's not as if we couldn't use economic development here, but you'd have to look far and wide for signs of urban blight.
Where the TIF districts are set up to accomplish their goal of providing economic development in blighted areas, the arrangement is a good thing. I'm sure a lot of citizen-residents of these areas are strong supporters of their TIF, and we haven't seen the blowback from these supporters yet.
Perhaps more of an effort should be made to oppose the forming of new TIFs in areas that aren't blighted--like the LaSalle district you mention. But, as you say, there's nothing here that will garner more revenue for CPS this year or next.
Raise Your Hand and the CTU should focus their efforts more on achievable goals to obtain more school funding.
In the News: TIF funding for CPS; the year of the education docu
CPS source said "the ideal candidate'' for chief ed officer: "a highly respected minority educator from within.'' Really?! Wasn't this a problem of BEW hiring-keeping her sistah's, friends, etc., giving out $$ in consultants, when they were huritng their schools and corrupt. One Latino 'insider' under consideration for this position has her area science coach walk her dogs! Ms. Caron only cares about the kids and she would be able to check Daley and Ron. What is wrong with that?!
In the News: TIF funding for CPS; the year of the education docu
Are you the Science Coach? Then how do you figure that? Let's stick to facts and not gossip!
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