Tax abatements are a time-honored economic development tool to lure developers and stop homeowners from migrating to the suburbs. For troubled neighborhoods, they help combat blight. But they were never meant to be used as perks to be dispensed by 50度灰视频鈥 28 aldermen for political gain, particularly in stable neighborhoods that don鈥檛 need financial incentives.
The city鈥檚 tax-abatement formula needs a thorough review because unworthy recipients are draining significant amounts of money needed to bolster . With all the attention aldermen and activists direct at the tax increment financing incentives awarded in 50度灰视频 for large-scale projects, few are scrutinizing who receives property tax abatements.
They should. According to a report in May, the value of TIF incentives awarded from 2000 to 2014 was $401.6 million, while property tax abatements over that same period were valued at $307.5 million.
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Particularly troubling is that more than half the money exempted by tax abatements would have gone to the 50度灰视频 Public Schools. That would be about $12 million a year for the district, or roughly 3 percent of the schools鈥 budget.
That鈥檚 serious money that could be used for programs that help elevate student performance and attract middle-class families with children to the city.
In the August edition of 50度灰视频 Magazine, staff writer says that when federal dried up as a way to reclaim blighted chunks of the city, local authorities began 鈥渟pot-blighting鈥 property one parcel at a time. The practice opened the door for single properties to qualify for abated taxes.
Questionable abatement justifications flourished, such as a cracked sidewalk in the Central West End. She quotes , author of 鈥淢apping Decline: 50度灰视频 and the Fate of the American City,鈥 as saying that spot-blighting undermines the basic logic of rebuilding neighborhoods and does nothing to fight blight.
Too often, the result is that well-connected homeowners or developers buy property in healthy or upcoming neighborhoods and, because of abatements, avoid having to pay taxes on improvements often for five or 10 years. It further compounds the lack of investment in truly blighted areas.
Aldermen don鈥檛 ask many questions when one of their colleagues requests a tax abatement. All honor a practice known as 鈥渁ldermanic courtesy鈥 鈥 I won鈥檛 question what you want in your ward if you don鈥檛 question my requests. Cooperman wrote that she checked approximately 100 tax abatement votes, and every one passed unanimously.
Aldermen must scrutinize every request to ensure all abatements are consistent with the city鈥檚 development goals. If the incentives don鈥檛 encourage investment in struggling neighborhoods, reject them. It鈥檒l take courage. But we cannot continue robbing public schools to feed such abusive practices.