Cook County TIFs cost taxpayers over $2 billion

By freezing property values in a specific area, TIF districts artificially manipulate who pays the levy, leading to effective property tax hikes.

With property tax bills due today, Cook County taxpayers should know they could have paid about $2 billion less last year.

How? If there were no tax-increment financing (TIF) districts.

Lawmakers establish a TIF in an area they say needs additional investment because of dilapidation. A TIF freezes the equalized assessed value of property in the district for taxing bodies. In future years, the increased property tax revenue from the TIF, based on property value increases in the district, goes into a special fund.

That money is supposed to be used for development projects in the district, such as land purchases, demolition or site preparation, meaning it benefits private developers rather than going to schools, parks or other public services.

TIFs do not limit how much local governments can raise, because taxing bodies set their levies — the amount they request from taxpayers — independent of taxable property value.

So where there’s a TIF, the levy doesn’t change, but who’s paying it does, meaning TIF districts can serve to raise property taxes.

The total levy for taxing bodies in Cook County levy was $19.2 billion for 2024. That year the county’s 404 TIF districts saw nearly $28 billion in increased property values, and $2 billion in property taxes went back to them.

That $2 billion could have reduced others’ bills.

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Those within the TIF don’t get a break, either. They pay the same tax rate as those outside the district.

In 2024, the tax rate in one Ford Heights TIF district was 32%, according to the Illinois Department of Revenue. In Harvey, the rates in its five TIF districts range from 21% to 24%.

The equalized assessed values for properties within Harvey’s TIF districts rose by $13.2 million, and those districts collected over $3 million in taxes — money that could have gone to the city and reduced the property tax burden on everyone.

Right now Illinois municipalities can extend the life of TIF districts well beyond the 23-year limit via repeated 12-year extensions approved by the state. Thus taxpayer dollars that could go to important services can be locked away for decades.

In Chicago, TIFs have created a slush fund for the city. In the past decade the amount of TIF money Chicago has declared as “surplus” has increased nearly ninefold, from $113 million in 2016 to just over $1 billion for fiscal 2026. The 2026 surplus went to help close a budget gap.

Illinois law allows municipalities to declare a TIF “surplus” when elected officials, typically the city council, determine that some or all of the money in a TIF account isn’t needed for current redevelopment obligations.

Once it’s declared surplus, that money can be redistributed to the area’s taxing bodies, such as schools and parks, effectively allowing the city to “sweep” that “surplus” TIF revenue into general use.

Once money declared surplus is distributed, it doesn’t need to be returned to the TIF district.

Chicago’s longtime reliance on fund sweeps from TIFs to balance the city budget has surged in recent years. The consistent “surpluses” suggest either that many TIF districts don’t need significant revenue for redevelopment projects, or that the city is abusing TIFs to create a piggy bank for itself, the school district and other units of government.

State lawmakers should add measurable requirements for establishing TIF districts. They should also cap how long the districts can exist and limit extensions. Returning TIF dollars to general use would bring much-needed transparency and real property tax relief for Illinois residents.