Urban Inequalities

2014-2015 Policy and Social Engagement Fellowship

Faculty Partner: Rachel Weber, Great Cities Institute
Community Partner: Blocks Together

In Chicago and the US generally, Tax Increment Financing (TIF) is one of the most popular, and most frequently abused, economic development tools. TIF allows municipalities to designate an area for redevelopment and capture the expected increase

in property taxes to pay for initial and ongoing expenditures in the area. It is controversial

because TIF has the potential to divert resources away from schools, reinforce neighborhood

inequities, and allocate public tax dollars tocorporations and developers who need them less

than low-income neighborhoods of color. There is widespread demand from neighborhood

activists in Chicago for a more transparent and responsive decision-making process for

allocating TIF funds, and Participatory Budgeting (PB) holds promise as a tested method

for making this process more democratic. Through PB, community members directly decide

how to spend part of a public budget. We believe that using PB to distribute TIF funds can

further racial equity by empowering politically marginalized residents in Chicago to participate

in and better understand the public spending decisions that affect the quality of their

neighborhoods. To achieve this goal, we and our partners are developing a PB Chicago

TIF Tool Kit that can be used by communities interested in fighting for more community

participation in spending local TIF dollars.