The pressure is clearly building on the leaders of Chicago’s city administration to come clean on the question of Tax Increment Financing. The TIF model of infrastructure financing has been welcomed across much of the US in recent years as local politicians seek to access new sources of development funding. The Chicago experience is regularly cited by TIF proponents here in the UK because some of Chicago’s 160 TIF districts have clearly breathed new life into previously blighted communities. I have no doubt we can put TIF to similarly good use here.
Yet, Chicago’s voracious appetite for the TIF model, as exposed by local newspaper The Chicago Reader, provides a foretaste of what can happen when the advantage of focused and autonomous local decision-making collapses under the weight of commercial interest and partisan political influence. Not only have there been accusations of goalposts being moved, funds being diverted and the poor getting poorer, but the suggestion of a ‘slush fund’ at City Hall sounds ominous, and has raised the political stakes considerably.
It all seems a far cry from the way we do business in the UK, yet we cannot afford to avert our eyes. TIF is not a panacea. Hard-pushed business ratepayers deserve protection from local government decision-makers who may come to view TIF and the non-domestic rates levy as a bottomless pit of cash.
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