Ben Joravsky with Mayor Daley at a 2010 budget hearing. Photo: Hunter Clauss via Chicago Reader
For many years Ben Joravsky, my columnist colleague at the Chicago Reader, has provided an important service to the city with his insightful political commentary. He’s been as a key watchdog for local government, speaking truth to power on issues like Richard M. Daley’s effort to bring the Olympics to town, and educating the public about complex topics like the tax-increment financing program.
Although Joravsky and I have often differed on matters like the Lucas Museum of Narrative Arts proposal, I’ve never felt the need to respond in full to any of his articles until now. But the column he ran yesterday about the CTA’s rush to get a transit TIF passed in order fund the Red and Purple Modernization while Obama is still in office contains some questionable logic that needs to be addressed.
Joravsky argues that the funding push is an example of Mayor Emanuel acting on his motto “You never want to let a serious crisis go to waste,” taking advantage of post-election anxiety to pass what amounts to a huge property tax hike. “How can the mayor and aldermen say they’re not raising property taxes when actually they’re about to do just that?” he asks.
Joravsky is an influential figure, so it would be a huge loss if his article sways enough City Council votes to kill the TIF plan and, by extension, the crucial $2.1 billion RPM project, which surely wouldn’t get funded under the anti-transit Trump administration. (I didn’t provide input for Joravsky’s column but I gave him and our editor a heads-up about this Streetsblog post prior to publication.)
RPM would rebuild the Red and Purple Line tracks from Lawrence to Howard, upgrade signals, reconstruct four station and create a flyover just north of the Belmont stop to eliminate conflicts between Red, Purple, and, Brown Line trains. Under Obama, the U.S. Department of Transportation is likely to provide $1 billion in Core Capacity funding to cover the first phase of construction if Chicago applies by November 30. But first we need to line up local matching funds.
Earlier this year the state passed the transit TIF law, which allows Chicago to designate a zone near the RPM project area in which part of any future increase in property tax revenue will be captured in a special fund. The city estimates that this TIF will generate $625 million over its 35-year life span. This captured revenue would be used to pay back a federal loan to cover the local match for the Core Capacity grant.
North Side CTA trains are often packed during rush hours. Photo: John Greenfield
While tax-increment financing was originally created to help “blighted” communities, Joravsky implies that the transit TIF would have a reverse-Robin Hood effect. He notes that the new district would only exist on the North Side and would include decidedly un-blighted neighborhoods like the Gold Coast, Lincoln Park, and Lakeview, allowing them to keep most of their additional tax revenue in the area rather than sharing it with poorer parts of the city.
However, the faster and more frequent ‘L’ service enabled by the RPM improvements will benefit everybody who rides the Red, Purple, and Brown Lines, and hundreds of thousands of residents across the city live within a ten-minute walk of the Red Line alone. And then there’s all the citywide congestion, air quality, health, and economic benefits of encouraging more transit ridership and less driving.
Joravsky correctly notes that, unlike traditional tax-increment financing districts, the transit TIF wouldn’t divert any money from the Chicago Public Schools, an issue that he’s done a great job of highlighting in the past. Under the new law, the CPS gets the same proportion of any additional property tax revenue that they would receive if the transit TIF didn’t exist.
“But the city, county, and parks won’t get the tax dollars they’d otherwise get from this area,” Joravsky adds. “That means that when the mayor looks to spend more money to pay for something like hiring police, he’ll likely have to raise property taxes to compensate for the money he’s not getting from this TIF district over the next three-plus decades.”
The problem with this logic is that these taxing bodies can’t get their fair share of any additional property tax dollars if that additional revenue isn’t generated in the first place. Here’s why that might be the case if the transit TIF isn’t passed and RPM doesn’t get funded.