Emmy award-winning series W T Tw News explains on our website.

And as you just heard, you now know how TIF districts work and that they are a powerful tool, but no magic wand.

>> And with districts generating record amounts of money, could it be time to re-evaluate when where and how that tool gets used?

That is one of the recommendations in a report from the UIC Great Cities Institute.

Chicago's runaway development tool who paid and who gained from 40 plus years of tax tax, increment financing in the report, the director of the Great Cities Institute Teresa Cordova writes, quote, Over time public policies evolve.

Tools created to address specific challenge is often expand beyond their original scope.

As this occurs, periodic reassessment becomes not only appropriate but necessary.

Joining us is an author of that report, Matthew Wilson, the associate director of the Great Cities Institute at UIC.

Thanks for joining us that so great to be with So as we said, the title of the report is Chicago's runaway Development tool.

What are you all mean by runaway?

So 40 years ago when tip was first created, it was it had a more narrow goal of revitalizing downtown and blighted areas and >> over time, the number of tips expanded at its peak more than a 3rd of Chicago taxable properties were actually covered by tips.

It's closer to about a quarter today.

But over time, as you downtown received money and received a lot of revitalization.

The program continued and continued leverage a lot of money downtown, not as much neighborhoods that we would today.

Think of his more blighted.

>> What kinds of data to collect for this for this research and where the challenges with collecting that data.

>> There was a lot of challenges.

So one of the recommendations that we make is that the city should do a better job of accounting for tiff expenditures and where the money's coming from.

So we had to piece together a lot of different sources of data in order run our models and ultimately try to come up with some of the accounting for where the dollars have flowed and how much has been leveraged and ultimately what the implications are for Chicago taxpayers.

What were some of the pieces of data are some of what was?

Yeah.

we look how much money the tip system collects.

So collected a record.

1.5, 9 billion dollars in 2025.

So if you think of, you know, the just scale of this program, it's huge.

we think that in doing this report, you know, we want you know, inform the public about this public financing tool that as leverage is so much money and ultimately what the impacts of it are.

So we look at where the money comes from is a big part of this report.

So we estimate what the implications are for taxpayers.

So because as the graphic showed, a portion of taxes are frozen, everything that occurs above that due to any sort of increase in property value, whether it is because of the tip or not because of the tips.

So there's a crucial distinction that we make between creating value and capturing value.

So we see creating value is only a small share of what if tiff creates one dollar for every 55 it captures.

And by that, we mean that because the property taxes properties go up in value over time due to inflation, urban real estate markets, I'm sure if you know, deserved property prices in Chicago have gone up a lot and it's not necessary because of tips, but because TIF as it freezes the value, everything above that goes into the TIF district, it just sort of organically gets all this money put into its funds without actually having create.

And to that point, how were you able to separate the effects of TIF developments versus the other factors that you just named to that cause?

My money that used to go up.

>> Yeah.

So we really sophisticated modeling.

So we look at properties that are within certain proximity of TIF projects and we compare him to ones that are slightly further away within the models.

We can account for some of the stable differences between properties.

Ultimately what we want to make sure is when we do these accounting exercises that were comparing sort of apples to apples variance.

So we do that by ensuring that the areas we're comparing were on parallel trajectories in terms of how they were appreciating before tip and when the to project comes around, we can see afterwards how much they diverge if at all.

So from that, we can account for how much of the property growth is actually attributable to the TIF versus how much was just growth that was going to happen anyway.

And from that, we get our creation first captured ratio or put another way tiff captures 98 points to 2% of property tax increases where can only be attributed to 1.8% Having created okay.

How is this report different from previous studies of a tip system?

>> I think it's a lot more broad in terms of we look at sort of a longer history of the programs we look at over 40 years of what's happened with Tiff.

I think the set of critical questions we ask about where does the money come from?

Where has it gone?

So we trace a lot of the expenditures to downtown.

So if we think of areas we might want to direct public investment today, we sort of want inform the public of how much is going downtown for some, which is going into neighborhoods.

And then we have recommendations about the accounting and the management of TIF.

And finally, some recommendations that we think can be important for the program moving forward.

Yeah, we're gonna get some of those as well.

>> What did you all find out about how tips have impacted downtown?

>> Yeah.

So a huge amount of so over time and the last to believe 20 years, 51% are sorry.

In the 40 year history of TIF, 51% of TIF expenditures have been concentrated 10 downtown tips.

So more than half of all the spending and tips is concentrated downtown from The city in the city's history.

So sort of one of our recommendations.

We think that.

The downtown a sort of met its stated purpose of having tips and having revitalize.

If you think about what downtown was like 40 years ago, it certainly wasn't of the very vibrant very shiny and glittery place that it is today.

So we think that it's sort of met its purpose in those areas and that those out to be expired in, we think about how to not be taking those in capturing those.

Those tax isn't and keeping them downtown.

So the report, though, you will do not recommend phasing out tips entirely.

You just recommend to that.

Some of those downtown tips should probably be allowed to expire.

But what types of developments would be appropriate for Yeah.

So I mean, one we're definitely not opposed to public subsidies for development.

We think that.

>> You know, the market has left a lot of places behind.

And we think that, you know, it's it's responsible to have public subsidies.

Create market creates, you know, crucial investments to improve people's quality of life.

So for those there's a lot of tips that have supported a lot of important developments that have, you know, improve quality of life in places that the market was overlooking.

So we think that, you know, we're not against any particular developments.

We just think TIF as the mechanism and sort of the default program that is the public subsidy to let's use in Chicago can use reform and it's for those sort of structural reasons of how it captures money that we think so the city's the past 3 city budgets have all declared record tip sweeps.

First.

>> What is that?

If sweep?

>> So a tip suite is when there's a large surplus and some of that surplus pay the tax 11 bodies like the video said the police schools, fire parks, things like that.

Some of that money is swept back to pay for those things.

So comes off of record surpluses.

So the tips have a balance and a lot of money that is not spent.

So there's 3.4 billion dollars in surplus in 2025.

So that's money that, you know, is levied from property taxes and people are paying and it just goes into tough accounts not spent.

>> So I mean, you say all of that at the same time, the city and CPS, for example, other taxing bodies they have had, you know, a budget shortfalls of the last few years to just kind of putting that in context with that.

But what does the report recommend for more oversight of that tip money?

For more, we say we think that because this is such a large share.

17.8% of collecting property taxes in 2025, went into a tiff district.

>> So we have such a large share of property taxes going into it.

We think that there should be a really close accounting and really easy ways of accessing where this money is going.

So we think that the management and also things like independent oversight committees will be really important for tracking that money just about out of time.

But up to that point, how else can the city be more transparent about tip money?

I think revisiting the stated purposes and seeing asking these questions of the monies that are being spent today is does this really align with the stated purpose?

And I think, you know, the public and I hope that we, you know, inform to not just the public, but a lot of elected officials and public policy.

People can look at this report be more informed about how operate in.

Ask those critical questions about if there needs to be