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Originally Posted by TR Devlin
I’m not opposed to TIFs in all cases but when a city’s credit rating is junk, I think the responsible thing to do is to raise taxes rather than continue to borrow more and more money. And Chicago is probably the most irresponsible city in the country when it comes to its finances.
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I'm not sure what your point is. Any form of financing for capex will involve some form of borrowing, but you need it to be tied to a dedicated revenue source to access the best interest rates. That revenue source can be anything, whether it is TIF, sales tax, etc.
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And if TIFs are such a good way to finance infrastructure, then why does Chicago use them far more than other cities. Do LA and Austin like raising taxes? No. They want major upgrades to their transit system and they want to be responsible in how they fund it. LA and Austin are investing in the future. Through its use of TIFs, Chicago is mortgaging its future.
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LA and Austin are both far more desperate for transportation improvements than Chicago. We have congestion problems and crumbling infrastructure, but our population is stagnant and our existing rail system is vast. LA would love to have the rail system we do, and they are set to get it, joining only DC and SF as the only cities to successfully build a comprehensive regional transit system post-WW2.
Chicago politicians can't necessarily count on support for taxes no matter how noble the goal. Voters are fed up and have zero trust in government. This is why TIFs became so popular - they are a backdoor property tax increase, not just in the TIF district but citywide. Politicians make it seem like only the users pay - the people living in the TIF district - but really everyone's taxes need to go up to make up for the shortfall, since the overall tax levy remains the same before and after the creation of a TIF.