What are TIF funds? Experts explain tax increment financing amid Chicago Public Schools budget crisis [Video]

CHICAGO (WLS) — Recent debate over how Chicago Public Schools should pay for it’s pension debt and a new teachers contract has centered around the use of TIFs, or tax increment financing.

Experts spoke with ABC7 to explain what TIFs are and how they work.

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Across Chicago, there are 124 TIF districts that are used to primarily spur development, like what can be seen in places like Fulton Market.

When a TIF district is established, the property tax revenue for government agencies is capped at the current level. As property values go up, any additional tax dollars go into a separate surplus fund.

“That money does not go to the schools, does not go to the parks, etcetera. It’s captured by the TIF district in a sort of a slush fund,” said Tom Tresser with the TIF Illumination Project.

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