Frequently asked questions related to the City of Chicago's Tax Increment Financing (TIF) program:
Q: How is a TIF district created and how many are there?
A: For every TIF proposed, an eligibility study is prepared by an outside firm; community meetings are held; and public hearings take place before the Community Development Commission, Chicago Plan Commission and the City Council. Since TIF began in the City of Chicago in 1984, more than 170 districts have been created, 147 of which were active at the start of 2016.
Q: Is it true that TIF dollars only go to big downtown projects and not other areas in the City?
A: No. Areas where TIF districts are designated are often characterized by population losses, business stagnation, building disrepair, disinvestment and other negative influences. Many of the newly created and retained jobs each year are the result of redevelopment agreements involving TIF. The City dedicates a significant amount of TIF funding to help residents maintain their homes affordably, since it is important to preserve existing housing and keep it affordable for homeowners. The TIF/Neighborhood Improvement Program (TIF/NIP) has 1999 provided $17.9 million in TIF to help 2,687 units in 17 communities across the city. In addition, since 2001, TIF funds have helped more than 400 businesses in more than 40 TIF districts with more than $13 million in grants through the Small Business Improvement Fund (SBIF).
Q: How do TIF dollars work with the private sector to benefit a community?
A: Chicago’s TIFs have provided $1.5 billion in TIF assistance to reimburse private developers for eligible costs, such as rehabilitation of existing buildings, land acquisition, site preparation, and environmental remediation. In return, the private sector has invested more than $8.4 billion in their neighborhood development TIF projects. That’s $6 of private investment for every $1 of TIF funds invested.
Q: Do TIF districts create jobs and help provide job training?
A: Yes. The TIFWorks program specifically stimulates business success by funding workforce training costs—for incumbent and new workers—for companies located in TIFdistricts. With TIFWorks support, businesses become better equipped to achieve their goals, from improving performance and productivity to expanding product lines and gaining newcustomers. A business may be eligible if:
Since 2003, TIFWorks has invested $11.5 million through 181 grants to train 10,417 workers and hire 840 new employees .
Q: Do TIF districts take money away from local parks and schools?
A: No. Expenditures for public improvements, like street and sidewalk repairs as well as parks and open space, account for nearly one-third of TIF expenditures. Additionally, the City has made a long term commitment to provide $762 million to rehabilitate or construct new public schools located in TIF districts. Further, school districts continue to receive all the tax revenue they were entitled to before the creation of the TIF district.
Q: Do TIF districts raise taxes?
A: No. Homeowners and businesses may see an increase in their property taxes, but only in proportion to the increase in the value of their property–the same if they were not in a TIF district. Further, TIF helps grow the City’s overall tax base –and therefore helps keep everyone’s taxes lower – by bringing new properties and new businesses onto the tax rolls that would otherwise not exist.