Chicago City Council approves $5.5 million TIF subsidy for private health provider

Chicago City Council approves $5.5 million TIF subsidy for private health provider

Under the guise of rehabilitating underserved communities, Chicago City Council approved another tax transfer to a private company.

The largest Catholic health care network in Illinois is set to inherit a generous subsidy, following a Chicago City Council vote Jan. 17.

Aldermen voted 31-18 to redirect $5.5 million in property tax revenues to Presence Health for its headquarters in the Loop, in exchange for the construction of four health care centers in underserved neighborhoods. The funding comes from Chicago’s tax increment financing, or TIF, scheme.

The roll call was notably split, given City Council is notorious for voting in line with Mayor Rahm Emanuel’s wishes. “That’s one of the closest votes since Emanuel took office seven years ago,” the Chicago Sun-Times noted.

This reallocation of public funds is part of a TIF deal between Chicago City Hall and the Presence Health system that was initiated in 2013. The stated purpose of such TIF arrangements is to spur urban revitalization by luring private interests with special incentives to invest in blighted neighborhoods.

But the realities of TIFs have proven quite different. TIFs have been shown to deprive local communities of resources necessary to deliver services – and the definition of “blighted” has expanded to include some of the city’s most developed areas. According to the Cook County clerk, a remarkable 1 in 4 properties in Chicago are located within the confines of a TIF district.

TIFs siphon property tax revenues into the hands of the mayor, who is then enabled to dole out favors to politically connected private entities.

A repeat loser in this slush fund scheme is the Chicago Public Schools system. TIF districts effectively impose a ceiling on revenue flowing to the school system, while any revenue generated above this ceiling is placed into an opaque TIF treasury,

Some school districts in Illinois have even started to sue in response to TIF deals’ effects on public schools.

The “revitalization” end of the agreement is never a guarantee – at least one study has found that TIFs have not spurred growth in Chicago – but the bounty of corporate welfare is often paid up front, anyway.

TIFs are no new invention – and Presence is far from the first company to reap the benefits of this kind of exchange. In fact, the Illinois General Assembly adopted the Tax Increment Allocation Redevelopment Act in 1977. But on Emanuel’s watch alone, TIFs have diverted $1.6 billion in revenue from schools, libraries, parks and more.

When Emanuel unveiled his proposed 2018 budget, he championed “the city’s $166.9 million tax increment financing surplus,” according to the Chicago Sun-Times, trumpeting that $66 million of which would “go to the Chicago Public Schools to pay for security, Safe Passage and after-school programs.”

The mayor’s pledging of this fraction of the TIF surplus to CPS is little more than a political gesture. What the mayor fails to consider is what siphoned funds away from CPS in the first place.

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