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Transit TIF Districts Pass State House and Senate, Would Fund CTA Projects

CTA Blue Line congress modernization
The CTA wants to modernize the Blue Line's Congress branch, and onedesign some of the stations and possibly reopen some closed entrances at single-entry stations. Image: CTA

A new bill that would generate more funding for four large-scale Chicago transit infrastructure projects, without diverting tax revenues from schools, passed the Illinois House and Senate today. The original bill was introduced in January 2015, spearheaded by the Metropolitan Planning Council. It awaits Governor Bruce Rauner's signature, who is expected to sign a budget today after a year of operating the state without a budget for a year – reducing funding for transit agencies, schools, and social services.

The funding would come from "transit TIF districts" that would have boundaries extended up to a half mile around Chicago's Union Station (to fund the changes in its master plan), the CTA's North Side Main Line, the CTA's Red Line extension, and the CTA's Blue Line Congress branch modernization and possible extension. The bill (pdf) enables the Chicago City Council to pass a similar law to create the actual districts, but sets limits on how far the districts can extend from the proposed projects' area.

They would work much like existing TIF districts, where the property taxes assessed on any incremental increase in property values since a district's inception is deposited in a separate fund. This is a form of value capture in that an increase in property values spurred by the transit infrastructure is used to help pay for it.

Other key differences are that the transit TIF districts would expire in 35 years instead of the originally-proposed 50, and that instead of a blanket maximum length of six miles, each district has a specific maximum length. Fifty years was proposed because that is the useful life of a transit facility.

The most important difference between common TIF districts and the transit TIF districts is that the new transit TIF district doesn't divert any money from schools. The legislation says that any school district overlapping the transit TIF district will receive all the money due to it as if the transit TIF district didn't exist.

After making the payment from the transit TIF district fund to the school district, 80 percent of the remaining portion would go to pay for the transit project, and 20 percent of the remaining portion would go to all other taxing districts – library, city colleges, etc. – in the proportions as if the transit TIF district didn't exist.

Mayor Rahm Emanuel issued a statement about the bill's passage in the state House and Senate, saying, "Today marks the next chapter in the work we started shortly after I took office, to modernize the Red Line from 95th to Howard" and building the extension to 130th Street. "With this bill," it said, "in just a few years we will have done what once seemed impossible."

Metropolitan Planning Council vice president Peter Skosey said they worked closely with Illinois state senator Heather Steans (7th) and Illinois state representative Ron Sandack (81st) to pass the bill. He echoed Emanuel's statement and said, "This effort is essential to financing long sought improvements to the CTA's system and matching federal transit grants available to do that work. Without the funds created by this value capture bill, I cannot see how these projects would proceed."

After Rauner signs the bill, then the City Council can start the hard work to create an ordinance that gives them this new transit-funding TIF district. These transit TIFs would generate millions of dollars that the CTA could use as the required local match to federal funds necessary to build or rebuild important transit facilities – and without diverting money from Chicago Public Schools.

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