The City of Chicago has given private developers over $350 million in subsidies since it established its Tax Increment Financing program over 15 years ago. But despite the enormous importance of TIFs to residents, businesses, and taxpayers, no one has released a comprehensive study about how these public dollars are being spent. Until now.

The Neighborhood Capital Budget Group, a decade-old coalition of nearly 200 community groups, has completed "The Chicago TIF Encyclopedia," the first major report on how well TIFs are really working in Chicago. The report compares the "conventional wisdom" about TIFs with a "community benefit index" that measures the issues that are of pressing importance to the residents and businesses directly affected by the TIF program. These issues include displacement, gentrification, public works investment, job creation and training, public participation, and affordable housing. The Encyclopedia also includes a detailed case study of the Central Loop TIF – Chicago’s largest, oldest, and most controversial TIF district.

Among the report’s major findings are:

• Most neighborhood TIF districts so far are failing to generate substantial money for redevelopment projects. While property values are rising in the TIF districts, most have yet to put enough "money in the bank" to fund the sorts of projects that would benefit existing residents and businesses.

• TIF dollars are being used to fund shopping malls and chain stores, not to revitalize Chicago’s neighborhood business districts. These shopping mall projects have attracted less private investment than TIF-funded industrial or residential projects.

• Industrial projects that benefited from the TIF program have generated the most private investment at the lowest cost to taxpayers. These projects have the potential to benefit communities by creating well-paying jobs for Chicago residents. NCBG’s report recommends that the City sharpen its focus on industrial TIFs and make an up-front commitment to fast-track projects in Chicago’s neighborhood industrial corridors.

• The City is using TIFs as a substitute for other types of economic development assistance, not a supplement as the law intends. This practice is especially apparent in the public works program. Very few TIF dollars are being used for basic neighborhood infrastructure programs, while dollars in downtown TIFs are being used for beautification projects that "guild the lily."

• Members of the public continue to have very little input into the TIF process, either in the initial designation of the TIF or the ongoing decisions that will be made over 23 years about how TIF dollars are spent. The failure to include the public in the process is reducing the effectiveness of the TIF program.

The Chicago TIF Encyclopedia also includes recommendations for how the City can reform the TIF program for the benefit of all Chicagoans.