Wednesday, November 14, 2007

TIFs in Chicago... and the connection to last weeks mayoral race.

... but not the connection you may think.

Think TIFs are only debated here? A study released earlier in the week by the Chicago Civic Federation says that Tax Increment Financing (TIFs) remains a powerful tool for Illinois municipalities to spur economic development, but better public reporting is needed on how governments use the revenues. You can read the full report here.

There are lots of fundamental debates on the uses of TIFs. No time to get into most of that. The current issue with TIFs at least in the city of Pittsburgh is with a proposal to actually reduce the size of certain TIF districts in the city. That may seem strange but as the article points out there is a fundamental reason for this. The city is limited by state law to only give TIF's on 10% of the city's property base. and it is over 8% right now. Seems like we have some leeway before hitting that 10%, but really not. Not mentioned in that article is the problem that one of the TIF's in place is for the PNC tower going up downtown and once it is completed... guess what, the value of the property goes up and the percentage of the city's property tax base that is TIF'd goes up as well. So the city is effectively at its limit now and needs to decrease TIF districts if it intends to do any more.

I have made my case against the broad use of tax incentives as they exist these days, so I won't repeat myself. But all of these debates over TIF's, tax abatements, or the myriad of other tax policies that are designed to promote investments could be simplified, strengthened and made a whole lot fairer in one fell swoop. How? I have a long post percolating in my head over the past, and possible future, use of the land tax here in Pittsburgh. and lest I incur the wrath of the many homeowners who pushed to have the tiered tax eliminated after the 2001 property reassessment in Allegheny County, I really believe there could be ways to implement it without unduly impacting the taxes on existing residential parcels.

Which leads me to a curious point that ties all of this to the mayoral race. If you compare the election results to past races in the city, there is some clear analogy to between last weeks results and the 1999 race for Allegheny County executive. At least within the city the % Roddey sure looks similar to the % Desantis. That Roddey-Wecht race was amazingly close overall even though Roddey lost in the city by a large margin. Nonetheless he lost by a lot smaller margin that was typical of Republicans running in the 1990's. You can make the case that the smaller city margin, though still a loss, was the margin that gave Roddey the victory over Cyril Wecht.

But what does that have to do with TIFs and property taxes? Well, the difference between 1999 when Roddey beat Wecht and 2003 when he lost to DO was impacted a lot by the clear loss of voters in the City's East End, specifically Shadyside and Squirrel Hill. He won the majority of those votes in 1999, but lost those same exact voters a mere 4 years later. Why?

The answer seems to be the mass reassessment of property values across the county and how that was handled. I have commented on that in the past ( about some of the problems managing the initial reassessment. While all sorts of people were mad at how the assessment was conducted, the city had this compounded problem of having a two-tiered tax that essentially exaggerated the impact of the assessment on certain communities. That anger was concentrated in specific East End neighborhoods. So Shadyside and Squirrel Hill property owners were the ones angriest about the assessment and split tax and having a fair amount of sway, the city's split tax was promptly eliminated. The reassessment and new property values would stay, and the overall anger over the whole process translated directly into a big flip in votes away from Roddey. He would lose and move out of the city rather promptly after leaving office after a single term.

So, if that stream of conscience has not lost you, it may have lost me... I am still pondering what the election results last week really mean. All this talk of polarization in the city is troubling and I really wonder if it is true. It's clear that there are groups in the city that voted for LR and others who didn't. The group that didn't correlates directly with the group of voters that first put Roddey into office and then kicked him out after one term. So it's clearly a mass of very independent minded voters that have some similar interests to produce such cohesive voting. I am just struck by the fact that the reasons for that cohesiveness are far more dynamic than all the pontificating today would lead you to believe. Republican or Democrat, reform minded or not, liberal, conservative or progressive, pork rinds or pierogies? Is that really the debate going on? That same block that voted against LR last week was just as motivated by very different reasons to vote cohesively in 1999 and 2003. Maybe something else altogether is going on? I really don't know what it means.....


Anonymous Anonymous said...

The reason for the shift in 7 & 14 from 1999 to 2003 was that in 2003, Roddey was no longer running against Cyril Wecht. Cyril is well known to the mostly liberal, heavily Jewish voting block - and in this case, familiarity bred contempt.

Wednesday, November 14, 2007 12:50:00 PM  
Anonymous Anonymous said...

I have to agree with Patrick here. Maybe the real answer is as simple as that. Maybe it's a "lesser of two evils" thing, and Roddey was the lesser in '99 but not in '03.

Thursday, November 15, 2007 9:25:00 AM  
Blogger C. Briem said...

which is kind of the Tip O'Neill extension: All Politics is Personal. I defer to others on Wechts support within the Jewish community, but it is clear that Cyril was wont to provoke strong emotions for and against him from just about everyone... which may indeed just be a reflection of his long tenure in local politics... but if these personal things did trump other considerations then as I said, it puts the history of election returns in a very differnt light than the box people are trying to put it into of late.

Thursday, November 15, 2007 1:35:00 PM  
Blogger Third Rail said...

Tune in tonight for out interview with world-renowned forensic pathologist Dr. Cyril Wecht. Feel free to call in and talk to him on air. Check it out at 8 pm EST Wed. Dec. 5th at

Wednesday, December 05, 2007 6:28:00 PM  
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