Civic Federation Blog Provides Rapid Response Analysis

December 22, 2009

The redesign of the Civic Federation website in July has provided the public, government officials, and the media better access to the Federation’s analyses of government services in Illinois. The regularly-updated Civic Federation blog especially has provided a constant source of information on the issues that the Federation covers, including local budgets and pensions, taxes, privatization and asset leases, and commentary on events in the news.

Blog posts about local government budgets feature heavily on the Federation blog. The blog’s coverage of “budget season” started in July with the publication of a blog post discussing the Federation’s analysis of the City Colleges of Chicago’s FY2010 proposed budget and concluded in December with a post that highlighted the Federation’s support of the Metropolitan Water Reclamation District of Greater Chicago’s FY2010 proposed budget.

In between, the Civic Federation published blog posts discussing the proposed budgets for Chicago Public Schools, DuPage County, Cook County, Chicago Transit Authority, City of Chicago, Forest Preserve District of Cook County, and the Chicago Park District.

These blog posts provided additional commentary on the budget analyses and context to the Federation’s recommendations. The blog post “Tip of the Iceberg” discussed the Chicago Public Schools FY2010 proposed budget. The post looked at the District’s escalating pension liabilities and explained how the large increase in the District’s annual contribution is largely due to a decline in the value of the investments held by the pension fund.

The fiscal health of public pensions across Illinois is one of the Federation’s major interests as pension underfunding has a huge influence on governments’ fiscal health. “Chicagoans, can you spare $10,037?” illustrated how the unfunded pension liability for FY2008 reached $10,037 per capita. The post said “Property taxes paid by Chicago residents (both owners and renters) support the four pension funds for City of Chicago employees as well as the pension funds for employees of the Metropolitan Water Reclamation District, Cook County, Cook County Forest Preserve District, Chicago Public Schools, and the Chicago Park District. Chicagoans also pay sales taxes that help to support the Chicago Transit Authority pension fund (CTA does not receive property tax revenue).”

Property taxes, too, also received significant attention from the Federation blog. “Will my property tax bill go up or down?” helped make sense of the new Cook County property tax rates but pointed out that “The Cook County property tax system is so complex that it is impossible to predict exactly how the new tax rates will affect an individual property owner’s bill.”

Chicago TIF Still Cloudy, Even Under Sunshine Ordinance” discussed efforts by the City of Chicago to increase the transparency of tax increment financing, or TIF, in Chicago by improving the functionality of the Department of Community Development’s website and improving the public’s access to information about TIF. The Federation noted:

While the new website is an improvement, more could be done to shine light on TIF. In our 2007 position paper, the Civic Federation recommended that financial data on the City’s use of TIF be provided in the same electronic format that is required for local governments under the State of Illinois Fiscal Responsibility Report Card Act. This would ideally include a single report produced by DCD summarizing financial data and statistics for all TIF districts, rather than only providing the annual financial reports of individual TIF districts. Additionally, the City should compile financial data of all of the TIF districts into a user-friendly database, similar to the Illinois Comptroller’s Annual Financial Report database of local government finances.

The issue of TIF and how it funds the Chicago Public Schools System was the subject of two posts. “Chicago Public Schools Reap TIF Revenues” discussed how CPS has received almost $400 million in TIF revenue since 1984 and is scheduled to receive another $491.3 million. CPS has used this money to build and renovate schools and improve ADA accessibility in 15 schools. The post displayed a large graphical breakdown of TIF appropriations by facility.

The companion post, “TIF Does Not Take Money Away From the Chicago Public Schools,”  explained that:

TIF does not take away tax revenue from CPS or any other unit of local government in Chicago; instead, it raises property tax rates higher than they otherwise would have been. Taxpayers both inside and outside of TIFs have higher tax rates due to TIF, but it is not quite true to say that we all pay more taxes because of TIF. If TIF did not exist, it is reasonable to assume that most municipalities would raise some other tax revenue to fund economic development and related infrastructure.

The post also discussed the effect of the 1995 Property Tax Extension Limitation Law, often called “tax caps,” on how much revenue CPS can collect from property taxes.

Asset lease deals and how governments should utilize the proceeds from such deals was discussed in “The “Long” and “Short” of City Asset Deals," “What has Chicago done with the Billions of Dollars in Long Term Asset Lease Proceeds?” and “Protecting Proceeds From Long-Term Asset Leases."

These posts primarily focused on the City of Chicago’s deals to lease assets such as the Skyway, parking meters, and downtown parking garages to create long-term reserve accounts or “rainy day funds.” In “Protecting Proceeds,” the Federation noted that it “believes that asset lease funds should not be used for operating expenses. Instead, they should be primarily dedicated to retiring debt, making long-term capital investments and creating substantial long-term reserve accounts.” The Federation accepted that these funds may be used sometimes during emergencies to provide funding, but a firm policy stating the conditions when reserves may be drawn down should be established.

However, Chicago’s plan to use $370 million of the proceeds from the parking meter deal to plug a gap in the City’s FY2010 budget was a decision the Federation was unable to support. To read more about the Federation’s position on the use of the proceeds from assets leases in FY2010, see our full analysis of the proposed FY2010 City of Chicago budget.