EVANSTON, IL: Stop or slow “5/5 TIF District” proposal

Evanston, Illinois is in a crisis of public trust. The root causes of this crisis are thousands of years old (erosion of women’s personal and public authority), hundreds of years old (moral and logical contradictions in the U.S. Constitution), decades old (acceleration of climate disruption and economic disparities), compounded by national and global events of the last few years (overt cruelty, austerity, and destruction while the whole world watches). We live in a toxic mess of confusion and corruption in outdated institutions exacerbated by racism, sexism, xenophobia, class blindness, jargon, lies, etc. It is not possible for Evanston to address these root causes solely within the boundaries of the City with tools that were created by that toxic mess — e.g., tax-increment financing.

We have had our own public trust issues within the City of Evanston, some of which are still on-going and are certainly exacerbated by national and global stresses in addition to statewide and metro-wide stresses. In that context and in response to a proposal to create a TIF district in Evanston’s 5th ward, many residents are calling for a halt to the 5/5 TIF District or at least a slowdown. I support those options.

The purpose of a halt would be to create space and time for a better civic conversation about immediate needs in the context of outdated structures and serious stress in Evanston residents, businesses and City officials.

The purpose of going slowly would be to revise the proposal to incorporate more accountability, democracy, and precision according to the 21st century wisdom that we’ve gained collectively about our socio-economic-political system, especially in the last five years.

CONTENTS

A. INTRODUCTION
B. BEST OPTION: Vote “no” on principle & consider alternatives re City need for $$ + racial equity
My preference is that the 5/5 TIF be voted down on principle and that the City consider alternatives for discussing the need for racial equity and $$ in Evanston
C. SECOND-BEST OPTION: Revise TIF before approval
If the City chooses to adopt the 5/5 TIF, it should be revised before approval to (a) eliminate inconsistencies, and (b) include missing accountability mechanisms. 
D. RESOURCES
— Evanston TIFs 
— GPI (Genuine Progress Indicator), a more accurate economic metric than GDP (Gross Domestic Product)

NOTE: This issue and scheduled vote (Sept. 27) came up rather fast and I haven’t had time to consolidate my thinking or edit this blog as much as I’d like. Mostly, I just wanted to get my basic opinions and alternative ideas down in print. 

A. INTRODUCTION

Thanks to many Evanston residents for warning us about the 5/5 TIF district proposal and for not letting up until we’ve had some good public discussions — in EVERY Evanston ward. In trying to find the history and the origination of the 5/5 TIF district, it seems that 5th ward residents and/or officials had been thinking of a 5th ward TIF district for some years, going back to Ald. Delores Holmes’s tenure. According to a recent Evanston RoundTable article, former 5th ward Ald. Robin Rue-Simmons proposed a 5th ward TIF two years ago, but it’s not clear what happened between then (2019 ?) and the City Council authorization of funding a study by a consulting firm in February 2021.

This was during the 2021 election campaigns, before the election in April, when Ald. Rue-Simmons had already announced that she would not run again and before the election in April. The April election saw the defeat of three long-time incumbents, in addition to a new Mayor, new City Clerk, and new 5th ward alderperson (based on the incumbents’ decisions not to run). 

It seems that City staff has been spearheading the idea of a 5th ward TIF, notably the Economic Development department, not necessarily people in the 5th ward or the 5th ward alderperson.

Before I go further on the proposed 5/5 TIF district (which currently includes part of the 2nd ward), let me provide some context for my opinions.

1. Economic development: Not appropriate for government in a capitalist economy
a. I don’t think economic “development” is an appropriate activity for a governmental jurisdiction in a capitalist economy. The primary purpose of government in regards an economy should be to create and maintain a level playing field — economically, politically, socially, and ecologically. 

b. Given the history and legal structures of the U.S., the State of Illinois, and Cook County, it was and is inevitable that any economic “development” will favor the “haves” — what’s left of the middle class, the rich, and the super-rich — over the “have nots” — people whose survival needs are not assured on a regular basis or who don’t have “discretionary” money for investment.

c. While I understood the reason for the creation and expansion of the Economic Development department (by former City Mgr. Wally Bobkiewicz), I was skeptical at the time. My fears have proven true because, when we had the time to address the root causes of growing income inequality, growing homelessness, etc. (in the aftermath of the “great” recession) neither the U.S., Illinois, Cook County, nor Evanston made any effort to do so. See section 2a for “Long-term” alternatives for City action (Democratize our operating systems by joining existing initiatives). 

d. Currently, in Sept. 2021, I am not suggesting that we eliminate the Economic Development department. Throwing the baby out with the bath water is never a good idea. Paul Zalmazek (head of Evanston’s Economic Development department), his team, and the commercial districts have done yeoman work to get us through COVID, in addition to being innovative and hard-working before the pandemic hit.

2. Fifth ward is not the only ward where Black people live and Black businesses exist
In a July 12, 2021 Patch article, Jonah Meadows quotes Paul Zalmezak:

Zalmezak said city officials aimed to leverage the city’s efforts to provide reparations for housing discrimination from 1919 to 1960, as well as opportunities for additional money from the American Rescue Plan Act, the $1.9 trillion federal relief bill approved in March. 

“We’re really trying to focus and use this as a financial tool to really focus on the events of last summer,” he said. “And, really, the awareness that we as a community have now as it relates to Black entrepreneurship and the challenges — the structural racism and other issues pertaining to Black commerce in Evanston — and also the historic challenges with redlining.”

a. While the 5th ward may be composed of predominantly Black people and Black businesses, it is not the only ward in which Black people live and/or own businesses. This is historically true, not just a recent fact. 

As the mother of a biracial child who lived in the 4th ward from 1978 through 2000, I can confirm that Black people have lived all over Evanston and that there are historically Black areas in many Evanston neighborhoods, not just the 5th ward. (I have lived in the Nichols School area since 1978, 43+ years.)

b. If 5th ward residents and businesses want to create a Black cultural-historical center in that area, with input and support from other Black people and businesses, as well as the City and other citizens, I think there might be some interest and support for using public resources to do so.  

c. But if the 5/5 TIF is proposing more generalized (read fuzzy, unknown, opaque) economic development including repairs and support for Black people’s homes in the 5th ward, I’d like to know what other Evanston residents think about that, especially Black people who live in other wards (and whose homes, properties, businesses might benefit from repairs or improvements with City support).

B. BEST OPTION: Vote “no” on principle
Consider alternatives re City need for $$ + racial equity

My preference is that the 5/5 TIF be voted down on principle and that City consider alternatives for discussing the need for racial equity and $$ in Evanston.

1. PRINCIPLES on which 5/5 TIF should be voted down 
a. Basically a bait & switch technique
TIFs are just the latest over-complicated attempt to capitalize on the City of Evanston’s desperation for money, under the guise of economic development that benefits only a few while using public resources ($$, officials’ time, citizens’ time). As Paul Vallas said during the Sept. 22, 2021 webinar (hosted by www.EvanstonTIFS.org), a TIF is just a back-door property tax increase.

b.  TIFS operate like fiefdoms
More to the point of benefiting only a few, TIFs operate like little fiefdoms, independent of their own “country” (Evanston), but using resources ($$, staff time, citizen time) of the whole and not even benefiting all the people inside the fiefdom. As Kenilworth residents said when they voted down a Green Bay Road TIF in 2019, TIFs act like “de facto home rule” communities.

c.  Root causes of the City of Evanston’s desperation for money
Evanston is embedded in a larger operating system (money, banking, institutions, corporations) that is confused, outdated, and corrupt. We can’t solve national and global problems with a TIF. But we can join with other municipalities, counties, states, voters, organizations to do so.  

2. ALTERNATIVES for City action re need for $$ + racial equity
a. LONG-TERM: Democratize our operating systems by joining existing initiatives
The City and citizens should start working on the deeper issues in collaboration with voters, governmental agencies, nonprofits, and grassroots groups in
—Cook County
—State of Illinois
—the Upper Mississippi watershed/foodshed
—the U.S.

Specifically, I recommend that the City and citizens join any or all of the following initiatives to democratize our operating system (money & banking):
(1) Public bank (Illinois or Cook County) 
Public Banking Institute
@PublicBanksNow

(2) American Monetary Reform Act 
Alliance for Just Money 
@AllianceJust  
— Nationalize Federal Reserve
— Outlaw fractional reserve lending by commercial banks
— Create new U.S. Money (replace Federal Reserve notes) 

(3) American Monetary Institute conference, 16th annual 
Nov. 5-7, 2021
www.monetary.org 
Zoom originates in Evanston, IL.
Steven Walsh, a retired Chicago Public Schools teacher and resident of Evanston, is Exec. Director.

(4) U.S. Rep. Ilhan Omar’s 21st century economy bills 
There are no official summaries yet, but here’s the July 30, 2021 press release: 
— GPI Act: add Genuine Progress Indicator to federal economic metrics (more accurate than GDP). Co-sponsored by Marie Newman (IL3) 
— SUPPORT Act: basic income (UBI) pilot projects 

b. SHORT-TERM: Immediate boost to all Evanston, especially Black Evanstonians
(1) ARPA funds to all Black Evanstonians
Use $13,000,000 of ARPA funds to give every Black Evanston resident $1,000 to use as they like. Can be used by individual households as needed or can be combined with others for investment, community development, etc. No strings attached. This is based on 2020 census figures. 

Could also be structured:
—  $XXX for every Black voter? 
— $XXX for every Black and Native American resident or voter?

Questions:
— I don’t know how each Black resident would be identified.
— I don’t know if this proposal sounds insulting to Black Evanstonians; I’m just trying to come up with some new ideas.

(2) Fast-track a 5th ward neighborhood school
The current movement to build a new 5th ward neighborhood school, spearheaded by the STEM School of Evanston group, seems to be gaining momentum. 

(3) COVID Cash: Helicopter money for Evanston
In March 2020, I posted this blog about finding a community bank willing to act as a temporary public bank: COVID CASH:  Emergency Proposal for People & Local Economies. None of my monetary reform colleagues have yet to tell me why it can’t be done. The mechanism is based on commercial banks’ ability to create new $$ with almost every loan.

This is called fractional reserve lending and has been a U.S. public policy issue for at least 108 years (since the Federal Reserve was created in 1913). Many people have been trying to outlaw fractional reserve lending by private banks (including myself). But as long as it’s still legal, why can’t we use that money creation power for immediate public benefit — right here in Evanston?

Anybody have a friend in a local bank?

C. SECOND-BEST OPTION: Revise TIF before approval

If the City chooses to adopt the 5/5 TIF, it should be revised before approval to (a) eliminate inconsistencies, and (b) to include missing accountability mechanisms. Specifically:

1. Eliminate inconsistencies, such as non-5th ward properties.

2. Include missing accountability mechanisms, such as:
a. More specifics as to how TIF funds will be used (earmarking, etc.)
b. More democracy
— public input on TIF decisions
— limit discretionary funds
— ??
c. Detailed and accurate metrics, measuring REAL economic progress, such as using the Genuine Progress Indicator. Instead of measuring the success of a TIF by a single “positive” number — revenue, can we require a kind of double-entry bookkeeping that would also measure other impacts of the TIF on a yearly basis not normally included in U.S. economic metrics (e.g., GDP)?

GPI (or some other metric) should be applied to:
—the 5/5 TIF proposal
—annual reports
—any other reports
—any request for an amendment or extension
—final report (after 23 years)  

Examples might be: Will the TIF create/has the TIF created 
— more or less pollution
— more or less garbage
— more or less income inequality
— more or less extinction
— more or less leisure time
— more or less cancer
— more or less global warming
— more or less desertification
— more or less wildlife habitat
— more or less violence

Does the TIF measure:
— the value of housework as economic development
— the value of volunteer work
— the value of birthing, nurturing, and educating children

3. Other revisions?

D. RESOURCES 

1. TIFs 
a. Evanston TIFs
Facebook page of grassroots group organizing to stop the 5/5 TIF www.evanstontifs.org
— Talking points in advance of Sept. 27, 2021 City Council vote
— Invitation to community forum, Sept. 22, 2021 
— VIDEO from Sept. 22, 2021 forum with Tom Tresser, Civic LabHosted by Mary Rosinski, Sebastian Nalls, Trisha Connolly
Attended by 79 people, including Paul Vallas, who worked for Dawn Clark Netsch in the 1980s. Later become CEO of Chicago Public Schools, etc., had a lot of experience with TIFs.Facebook timeline has lots of screen shots from video.

b. DailyNU article: 5/5 TIF opponents demand council votes it down in resident meetingby Ilana Arougheti, Sept. 23, 2021

c. Kenilworth TIF (from Evanston TIFs Facebook page)In 2019, Kenilworth voted down a Green Bay Road TIF. One of the talking points against was that the TIF would create de facto home rule:
• NO Referendum to Borrow & Spend $23.7M 
• Taxpayers Guarantee ALL TIF Debt
• Gives Village $10M to Buy Buildings
• TIF INCREASES your Property Tax Rate

2. GPI (Genuine Progress Indicator) as an alternative to GDP as an economic metric

a. Book and video
Replacing GDP by 2030: Towards a common language for the well-being and sustainability community
by Rutger Hoekstra

(1) VIDEO (1 hour)  Excellent presentation of history of GDP, why we need something different and more accurateSuccinct and clear

(2) BOOK 2019 – quotes
— GDP measures the size of the economy yet the perception is that it measures whether a society is doing well or not.

— Here’s why GDP growth as measure of wellbeing – especially among the richest and biggest nations on Earth (20% is using 80% of the planets resources) – is dangerous:
·      The military grows: GDP improves
·      More garbage on earth: GDP improves
·      More cancer: GDP improves
·      More pollution: GDP improves
·      More income inequality: GDP doesn’t care
·      Housework: GDP doesn’t notice
·      More extinction: GDP improves or doesn’t care
·      Less leisure time: GDP improves
·      More fish extracted from the oceans that leads to colony collapse: GDP improves
·      More advertising; GDP improves.
·      More global warming: GDP improves

— Shifting from GDP to GPI will be simple and complex at the same time.
Simple: We would be moving from a gross number; single entry bookkeeping to the GPI which is double-entry bookkeeping; credits and debts.

Complex: We would move from the GDP, a number of just quantity, to the GPI, which is a number of quality – that has a variety of indicators creating crosscurrents and a more circular, steady-state (GPI) economy, where excess or overproduction in most sectors of our economy (extraction of minerals, fuel use, soil erosion and ground water, as well as in advertising, banking and financial, and the globalization of manufacturing) will be reduced. This will lead some of the wealthiest people and their surrogates in power to throw a hissy-fit, and accelerate conflict and war to maintain the system they have learned and are accustom to.  And the costs in some sectors, like fuel and food, will create stress for the poorest, yet, the counter to that are incentives in the GPI which will lead to the cost-of-living coming down for the poorest by reducing overproduction, leading to more durable and repairable products, local economy and more self-reliant stable communities. (This may give you a sense of where the GPI leads, yet it will require many more words and time to explain.)

b. Minnesota GPI Bill — 2021
Official bill page 
Very short and readable.

Key sections
Section 1. Minnesota Statutes 2020, section 16A.103, subdivision 1,is amended to read:

Subdivision 1. State revenue and expenditures. In February and November each year, the commissioner shall prepare a forecast of state revenue and expenditures. The November forecast must be delivered to the legislature and governor no later than the end of the first week of December. The February forecast must be delivered to the legislature and governor by the end of February. Forecasts must be delivered to the legislature and governor on the same day. If requested by the Legislative Commission on Planning and Fiscal Policy, delivery to the legislature must include a presentation to the commission. Each forecast document must compare the genuine progress indicator value derived under section 137.46 against other measures of state economic growth or well-being included in the forecast.

Sec. 2. [137.46] GENUINE PROGRESS INDICATOR.
Subdivision 1. Definition. For the purposes of this section, “genuine progress indicator” 
means a measure of economic welfare that includes but is not limited to the following 
components:
(1) household budget expenditures adjusted for income inequality;
(2) defensive and regrettable expenditures that do not contribute to welfare;
(3) the value of household investments;
(4) the costs of income inequality;
(5) the value of publicly provided goods and services;
(6) the value of services from human capital including the benefits of higher education, 
manufacturing jobs, and green jobs;
(7) the value of services from social capital, including the value of leisure time, unpaid 
labor, and Internet services;
(8) the value of services from built capital, including the value of transportation, water, 
and household infrastructure;
(9) the value of services from protected natural capital;
(10) the costs of natural capital depletion and degradation;
(11) the costs of pollution;
(12) the social costs of economic activity, including the costs of homelessness, 
underemployment, crime, commuting, and vehicle accidents; and
(13) other components described in current academic literature.

Subd. 2. Calculation. The Bureau of Business and Economic Research at the University 
of Minnesota, in consultation with the Center for Sustainable Economy and other relevant 
academic departments and the advisory board established in this section, shall calculate a 
genuine progress indicator for the state.
……
Report, annual
Advisory Board
$200,000/year appropriated to calculate & report GPI