A map of TIF overlay districts in the City of Chicago. (Courtesy City of Chicago)

A proposed new Illinois transparency law would make local governments reveal the costs of the tax deals they make with private businesses.

House Bill 3760 would require tax incentives to be listed as “community investment” yearly in comprehensive annual financial reports. The bill also requires more transparency in how local governments give away tax breaks through the Department of Commerce and Economic Opportunity.

State Rep. Jack D. Franks of Marengo (D-63^rd) sponsored the bill, which passed unanimously in the House April 13 and is headed for the State Senate.

“We’re just looking for transparency and accountability in local government,” Franks said April 14. Franks said too often local governments overlook the actual costs of tax incentives.

“Providing tax incentives can be good public policy, but it should be up to the taxpayers to determine if they are worthwhile,” Franks said in a statement.

Franks said the measure would lead to more accountability for TIF (Tax Increment Financing) zones. In Illinois, money raised through TIF districts is used to entice and reward developers to build in areas determined to be “blighted.” TIF districts soak up a portion of property taxes for a minimum of 23 years, taking funds away from schools, libraries, community colleges, counties and the municipality itself.

“My problem with TIFs is they become a slush fund for local governments with no accountability,” Franks said.

State Rep. Jack Franks

Critics have complained TIFs are overused and secretive. For example, in the City of Chicago in 2013, 30 percent of the land area of the city was within one of the 151 TIF overlay districts, according to the Chicago CivicLab TIF Illumination Project. That same year, TIFs sucked away $422 million in total property tax revenue, or 34 percent of Chicago’s total revenue of $1.24 billion, CivicLab said.

City governments are often tight-lipped about how the money is doled out, Franks said.

Franks pointed out transparency is also needed at the state level when the state of Illinois makes tax deals with corporations to relocate or stay in-state.

“Illinois residents need to know where and how their money is being spent, and this legislation will make that information more transparent,” Franks said.

The bill also requires that local governments report to the state the total value of DCOE tax credits awarded in a given year by Aug. 1.

The bill advances to the Senate, where it is being introduced by State Sen. Daniel Bliss (D-9^th).

— Tax-break transparency bill passes Illinois House–