City Hall will soon have a far-reaching decision on its hands: How to dispose of a huge, growing pot of taxpayer money collecting in a North Side special taxing district that has quickly outperformed expectations.
The district has already taken in just under $400 million since 2017. It is on track to pay off a major facelift of four Chicago Transit Authority stations and the century-old infrastructure connecting them way ahead of schedule and estimated to bring in just shy of $100 million annually by 2031.
The billion-dollar question is whether the CTA will keep receiving cash infusions from the district to help pay for future projects once the first phase is paid off, or if the money will instead be recouped by the city and other taxing bodies that are facing their own looming budget catastrophes.
Thanks to the rapid rise of property values within its boundaries, the “Red and Purple Modernization Phase One” tax increment financing district is on pace to pay off the $625 million earmarked for the first phase of overhauls to tracks and stations between Belmont and Bryn Mawr avenues by 2028, leaving 24 more years for its balance to balloon.
What to do with the money that keeps pouring in will likely be up to whomever occupies the fifth floor next term, be it Mayor Brandon Johnson or a successor elected in 2027. Johnson is already in a separate TIF tussle involving Chicago Public Schools and his office did not respond to requests for comment about plans for the burgeoning fund once its CTA commitment is complete.
Johnson has criticized TIF districts for locking away money that would be better used in disinvested communities. His signature economic development bond is funded by allowing certain TIF districts to expire in the coming years. But like his predecessors, Johnson has increasingly skimmed from TIF fund balances to plug budget holes, and he could do the same with the RPM district down the line.
The fiscal prospects for both Chicago and its transit authority are bleak. Such a large pot of money would be difficult for the city to cede by terminating the TIF early. The state authorized TIFs like RPM to benefit transit specifically, making it a natural revenue source for CTA’s future Red Line plans. The City Council rarely votes to let those districts expire early. Doing so would relinquish any built-up funds, divvying up the balance to give back to other taxing districts while allowing them to access that bigger tax base.
To David Merriman, a professor at the University of Illinois Chicago who has studied the TIF issue nationally, “there is not much of a conundrum. Once the TIF has provided $625 million it makes sense to dissolve it,” he told the Tribune in an email.
The current redevelopment agreement authorized under Mayor Rahm Emanuel limits the TIF to allocate no more than that $625 million to RPM. The city would likely need to amend it to spend on additional projects beyond that.
The CTA told the Tribune it is premature to be talking about future funding sources, but has made clear elsewhere there is more costly work to be done. Since 2023, the agency has been developing plans for RPM’s next phase, briefing the public and gathering input on needed fixes to the Red Line between the Addison, Sheridan, Thorndale and Howard stops, along with the entirety of the Purple Line Evanston Branch.
