April 24th, 2020
Over the last nine months, many local governments have creatively and effectively balanced the realities of pandemic health concerns and necessary social distancing measures with the responsibility of public access and transparency for public meetings. Unfortunately, others have avoided making even minimal efforts to provide the public with reasonable access to meetings and opportunity for public comment. CAC and individuals and community groups are busy monitoring hundreds of public bodies to keep them accountable.
As a reminder, on March 16, Governor Pritzker issued an executive order allowing public bodies great flexibility to meet remotely. He did not, however, suspend public access to meetings and encouraged public bodies "to provide video, audio, and/or telephonic access to meetings to ensure members of the public may monitor the meeting[s]." Two days later, Attorney General Raoul issued further guidance reminding public bodies of their duties under the Open Meetings Act and suggesting procedures to comply with the law responsibly.
CASE STUDY for Open Meetings Act Compliance During the Pandemic
The Lyons School District 103 Board ignored public access during five meetings in March and April. On March 17, the Board met entirely by telephone, without any public access or comment. During four subsequent meetings, access was limited to ten people, including up to seven board members, plus various staff, with any remaining spots open first to media and then to the public. Any members of the media or the public needed to show up at the meeting site to determine if access was available.
The Board failed to broadcast these meetings, nor did they record the meetings for the public to view later. The result was nearly two months of meetings without reasonable, meaningful public access.
For the first three of these meetings, the Board failed to provide an opportunity for public comment. The result was three meetings without public input or oversight.
Following these meetings, CAC submitted a request for review to the Public Access Counselor alleging multiple Open Meetings Act violations. Adding insult to this public accountability injury, the School Board failed to meet the statutory response deadline of seven business days, finally issuing a reply two months late. The School Board claimed that it has substantially complied with the provisions of the Open Meetings Act. In response, CAC community lawyers argued that "substantial compliance" is not the correct standard under the Open Meetings Act and has not been for at least twenty-five years. The Public Access Counselor agreed with CAC!
Read the determination letter, below:
Apri 24, 2020
ILLINOIS PUBLIC INTEREST AND NEWS ORGANIZATIONS REQUEST THAT GOVERNOR PRITZKER PROTECT THE FREEDOM OF INFORMATION ACT AS ESSENTIAL TO GOVERNMENT BUSINESS AND OPERATIONS
ELMHURST – The Citizen Advocacy Center and over two dozen Illinois public interest and news organizations have requested that the Governor’s office protect the Illinois Freedom of Information Act during the state’s disaster period as an essential governmental function.
The Freedom of Information Act is essential to the operation of local governments. Governor Pritzker’s Stay at Home Order, Executive Order 2020-10, identifies media outlets as essential businesses and operations; concomitantly, the media and the public’s most potent tool to monitor government activity is the Freedom of Information Act. "The Freedom of Information Act is central to our democracy and important to maintain government transparency, especially during difficult times,” said Robert K. Elder, President of the Chicago Headline Club. “We ask Governor Pritzker and the attorney general to uphold this vital part of maintaining public trust."
The Governor does not modify any provision of FOIA in any of his COVID-19 orders, presumably because compliance is possible without compromising public health. In contrast, Executive Order 2020-7 modifies two provisions of the Open Meetings Act to advance social distancing measures. It suspends the physical presence requirement to comprise a quorum, and it expands the reasons for which elected officials could choose to meet remotely. The Governor also encouraged public bodies “to provide video, audio, and/or telephonic access to meetings to ensure members of the public may monitor the meeting.” Likewise, the Governor’s Office should continue to ensure that members of the public may monitor government activities by accessing public records.
Public bodies should comply with the Freedom of Information Act to the extent that compliance does not compromise the health and well-being of employees or residents. The protection of public health and compliance with FOIA are not mutually exclusive, where compliance does not violate social distancing or other public health measures. Government officials and employees continuing to work at the office or who are equipped to work from home should provide records in response to FOIA requests.
"Like other workers who are operating from home, government employees may respond to requests and inquiries remotely,” said Maryam Judar, Citizen Advocacy Center Executive Director. "A common-sense approach to FOIA compliance during the stay at home order is incorporated into the statute. FOIA officers may contact FOIA requesters to narrow requests, identify readily responsive records, and negotiate timelines without violating measures that protect public health.”
Undoubtedly the FOIA process will be less efficient during this crisis, as some records may be temporarily inaccessible. In such circumstances, public bodies may invoke the unduly burdensome provision of FOIA, as long as they reply to FOIA requests within five business days. They should additionally inform the requester that these records will be provided when regular business resumes.
DECEMBER 3, 2019
LOCAL CITIZENS RECEIVE CITIZEN INITIATIVE AWARD FROM THE CITIZEN ADVOCACY CENTER
FOR THEIR COMMUNITY ACTIVISM
ELMHURST – The Citizen Advocacy Center (CAC) will recognize its 2019 Citizen Initiative Award recipients on December 11, 2019. Since 1997, CAC has honored local community activists and community groups who inspire democratic participation and use civic, legal, and community organizing tools to advocate for a self-identified issue of public concern. “Citizen Initiative Award recipients are proactive in addressing problems they identify in their neighborhoods. They organize, advocate, and make a difference in their communities. The award recognizes the crucial role of the citizen in everyday democracy. Because of their activism, democracy thrives, even in the face of adversity,” said Maryam Judar, CAC’s Executive Director.
The event starts at 6:30 p.m. on December 11, 2019 at the Citizen Advocacy Center, 188 Industrial Dr., Suite 106, in Elmhurst. It is open to the public and free of charge with a $10 suggested donation. Reservations are not required but are helpful! Call CAC at 630-833-4080 or email CAC@CitizenAdvocacyCenter.org to reserve a space.
The 2019 Citizen Initiative Award recipients are:
The Pick Neighborhood, Elmhurst, for successfully organizing neighbors around a common cause.
Being located behind one of the busiest intersections in Elmhurst, the residents of the Pick Neighborhood are mindful of balancing the need for development and preserving their small subdivision’s unique character. When residents learned of a proposed development to build a large gas station and convenience store on a lot adjacent to their neighborhood, they had environmental concerns that included potential noise, fumes, traffic, and impact on the Salt Creek. Working with a CAC community lawyer, residents dove into learning about zoning applications, requirements, public hearings, their rights at public hearings, and how to organize neighbors. The Pick Neighborhood packed the public hearing at the Elmhurst Planning and Zoning Commission and methodically presented their concerns. Their advocacy was successful as the proposed plan was rescinded. Residents in the Pick Neighborhood remain organized and are proactively working with the City of Elmhurst to plan for how to develop the vacant property.
Save Lufkin Pool, Villa Park, for organizing to save a community resource, transforming a neighborhood issue into a community issue, and increasing government accountability.
When the Village Board voted to close Lufkin Pool in late 2017, surprised residents formed Save Lufkin Pool to hold the Village Board accountable for not being more proactive in obtaining meaningful public input prior to closing such a vital public space without a plan to replace it. The group advocated for a plan that would allow the pool to remain open while the Village built a long-term plan to serve residents. Save Lufkin Pool successfully transformed their neighborhood issue into a community-wide election issue that affected the Village Board’s composition, organized neighbors to attend and speak out at Village meetings, and uncovered a failure of the Village to comply with bidding requirements. While the pool was ultimately demolished, Save Luftkin Pool organizers were successful in changing the civic landscape of their community to increase accountability and awareness in Villa Park. The group remains actively engaged in Villa Park.
Stan Zoller, Buffalo Grove, for his commitment to promoting the Freedom of the Press and the education of journalists from high school students to professionals.
Stan Zoller is an award-winning journalist with over four decades of experience, working as an educator of young journalists at the high school and college level for over 20 years. He serves on the board of the Chicago Headline Club, where he helps organize the annual FOIA Fest that brings journalists, watchdogs, students, and government officials together to discuss Freedom of Information Act and government transparency issues. Mr. Zoller previously served as Executive Director of the Illinois Journalism Education Association, helped develop and pass the Speech Rights of Student Journalists Act, an Illinois law that protects student journalists, and routinely alerts CAC to issues of concern related to student journalism.
Represent DuPage, DuPage County, for advocating for improved ethics for the DuPage County Board.
Represent DuPage is a chapter of a national nonprofit, nonpartisan organization focused on passing anti-corruption laws. Members of Represent DuPage have frequently spoken out at DuPage County Board meetings to promote best practices in appointments and elections. The organization is working to reform the DuPage County Board’s ethics ordinance to ensure enforcement of ethics provisions, limit campaign contributions from county vendors, and protect the public from conflicts of interest and nepotism. In consultation with a CAC community lawyer, Represent DuPage developed an ethics proposal that includes appointment of the inspector general by an independent commission, enhanced guidance for the existing Ethics Commission, stringent new restrictions on nepotism and conflicts of interest, and a "cooling off" period before former employees and officials can lobby the county.
The Citizen Advocacy Center is a 501(c)(3), nonprofit, nonpartisan, community-based legal organization. Founded in 1994, CAC's mission is to build democracy for the 21st century by strengthening the citizenry's capacities, resources, and institutions for self-governance. Recognition by CAC is not in any way an endorsement of any individual who is or may become a candidate for public office. For more information about CAC or to make a contribution, visit us at www.CitizenAdvocacyCenter.org.
July 11, 2019
Tax Increment Financing: Property Tax Diversion or Property Tax Surcharge?
Tax Increment Financing:
Property Tax Diversion or Property Tax Surcharge?
by Jacob Butcher, CAC legal intern
It is impossible to escape the impression that something has gone gravely wrong with the way that Illinois municipalities have employed the economic stimulus tool known as Tax Increment Financing, or TIF.
Last week, for example, the Chicago Tribune ran an editorial entitled “TIFs were abused. Time for a new approach to city investment.” Both Inspector General Joe Ferguson and former Cook County Clerk David Orr have urged TIF reform.
But what, exactly, is the problem? The standard criticism is that TIF diverts money from public schools and other government services to line the pocketbooks of developers. Call this the diversion thesis.
The diversion thesis receives support from a cursory glance at Chicago’s fiscal situation. At the beginning of 2018, the City of Chicago had over $1.4 billion sitting in its TIF accounts, and just earlier this year approved a $1 billion subsidy for Sterling Bay’s Lincoln Yards project. Meanwhile, the city is undergoing a pension crisis and numerous Chicago public schools are underfunded (50 were closed in 2013).
The diversion thesis has a kernel of truth to it, and it is correct in contending that TIF, as currently administered, is a scheme of regressive redistribution. But it mistakes the kernel of truth for the whole truth and misdiagnoses the primary mechanism by which TIF’s regressive redistribution is effectuated. But to understand why, we must delve into some of the mechanics of how TIF interacts with property taxes and government funding.
A Refresher on How Property Taxes Fund Local Governments
First, it is important to understand how local taxing bodies receive their property tax-based revenue.
To simplify, I’ll use the Chicago Board of Education as my example, and I’ll further imagine that the CBOE is the only taxing body in the city. To meet its budget, the CBOE first determines how much money it needs for the upcoming fiscal year. It then requests this dollar amount, which is called the levy. The City’s property tax rate is determined by figuring out what rate must be imposed in order to reach the levy.
The formula looks like this:
[the city’s total property value] x [the property tax rate] = [the levy].
There are two crucial takeaways from this:
First, the CBOE gets the levy it requests regardless of whether TIFs exist. TIFs thus don’t “divert” money from the CBOE in any straightforward fashion. (This doesn’t, however, show that the diversion thesis is completely wrong. Some taxing bodies may attenuate their levies because of the existence of TIFs, and otherwise might have requested higher levies to receive more tax dollars in the absence of TIFs.)
Second, if we hold the levy amount constant, a lower total taxable property value results in a higher property tax rate.
If it’s not clear why that is so, have another look at the formula:
[the city’s total property value] x [the property tax rate] = [the levy].
As one of the values on the left side of the equation decreases, the other value on the left side must increase to make up for it.
This second takeaway—the inverse relation between taxable property value and property tax rates—is the key to understanding how TIFs actually redistribute wealth. But to see why, we need a brief primer on what a TIF does.
A Refresher on How TIFs Operate
When an area is declared a TIF, the taxable property value of the area is frozen; during the lifetime of the TIF (23-35 years), the area’s taxable property value remains fixed at the value it had when the TIF was created.
This value is called the “base value,” and any increase in the property’s value during the TIF’s lifetime is called “incremental value.”
The incremental value of a TIF district is not taxable property value. This means that when the government is calculating what property tax rate it will impose to meet the levy, it performs this calculation using the city’s base value rather than its total value (total value = base value + incremental value).
By shielding incremental value from factoring into the tax rate calculation, TIFs reduce the city’s taxable property value. And remember: a lower taxable property value results in a higher property tax rate. TIFs thus increase property tax rates city-wide by reducing the amount of taxable property value.
(It’s also worth noting that people who live in TIFs pay their property tax rate not only on the base value of their property, but also on its incremental value. To the extent that TIFs do generate incremental value, this means that TIF-district-dwellers experience a double-whammy: both the increased tax rate that the whole city feels, plus an increased property value on which they pay that increased rate.
TIFs Act as a Surcharge on Property Taxes
It’s thus best to think of TIF mainly as, in the words of the Chicago Reader’s Ben Joravsky, a surcharge on your property taxes. The primary effect of TIFs is not to cause money that would otherwise go to the general treasury to instead go into TIF accounts. Instead, their primary effect is that money that would otherwise remain in your bank account instead goes into TIF accounts. How much more? It’s impossible to say for sure, but here’s one figure to consider: nearly a third of all property tax revenue goes into TIF accounts.
The counterargument to the surcharge thesis is that the incremental value would not exist but for the TIFs, and so it wouldn’t be taxable value in a world without TIFs because it wouldn’t exist at all. But it defies credulity to claim that, for example, the City of Chicago only or even mainly uses TIFs to invest in areas that otherwise would not attract developers: Chicago’s most lucrative TIFs—those receiving the greatest incremental tax revenues—are located in affluent downtown business and North Side districts. Economic analysis indicates that these areas would have developed without the aid of TIF.
A recent example: In April of this year, Chicago’s City Council passed an ordinance creating the Lincoln Yards TIF, which is nestled amidst some of the most affluent neighborhoods in Chicago.
Why a Surcharge Is a Form of Regressive Redistribution
Why is the function of TIFs as a property tax surcharge a form of regressive redistribution? To see why, consider who the surcharge benefits and who it burdens.
Who is burdened? In the first instance, TIF burdens property owners who experience increased property taxes. Illinois residents pay the second-highest property taxes in the country, and Chicago-area property taxpayers are in the 93rd percentile of the nation’s largest counties. TIF also burdens renters, who indirectly pay those increased taxes in the form of higher rents.
Who is benefited? TIF benefits developers like Sterling Bay (the developer behind the Lincoln Yards project) when TIF money is used to subsidize their development projects as a means of luring them to the municipality.
Defenders of TIF are quick to point out that significant sums of TIF revenues are also used for public services and infrastructure, like public schools and transit. This defense does some work against the diversion thesis by noting that some of the funds diverted from local taxing bodies into TIF accounts ends up getting funneled back into those same taxing bodies.
But this argument misses a key point: most TIF revenue is spent in comparatively prosperous parts of the city rather than in the south- and west-side neighborhoods that genuinely need the investment. This inequality in TIF-revenue expenditure is built into TIF’s legal framework: TIF money must be spent within the boundaries of the TIF district area in which it was raised (or in the case of contiguous TIFs, an adjacent one), and the TIF districts with the most incremental revenue to spend are in prosperous downtown and North Side districts. TIFs thus trap tax revenue in relatively wealthy parts of the city, where arguably redevelopment would have occurred in the absence of the creation of a TIF district.
TIF: a tool that exacerbates inequity rather than curing blight
A white paper by Chicagoland Researchers and Advocates for Transformative Education found that “[s]chools receiving TIF funds are strongly concentrated in the north half of Chicago … Meanwhile, the southern half of the city … is left behind. This is especially pertinent for Latino communities that are significantly underrepresented in the allocation of TIF revenues for school construction projects.” The same report noted that only 1% of CPS schools are selective enrollment schools, yet they receive 25% of TIF funds used for schools. “Meanwhile, local neighborhood attendance area schools … compose 69% of the CPS school system but only receive 48% of TIF revenues.
Tax increment financing, as presently administered by Illinois municipalities, is a sophisticated scheme of regressive wealth redistribution, benefiting entities with access to ample financial resources at the expense of everyone else. Although Chicago has been a focus of this critique, the mechanism of regressive redistribution is applicable in any municipality that uses TIF to develop so-called blighted areas. Change will only come when a critical mass of Illinoisans demands it. But to be effective advocates for change, we must understand how TIF works: TIF redistributes wealth from households to developers primarily by functioning as a tax surcharge rather than a tax diversion.