What the hell is up with the Bears stadium bill? (updating, maybe)

With four days left before the end of the Illinois legislative session, Crain’s Chicago Business reports (citing no specific sources) that state senators are “considering dramatically scaling back a sweeping megaproject incentive bill” to cut out everything except tax breaks for a Bears stadium in Arlington Heights. The idea here is to avoid debate on allowing property tax cuts for any development project over $100 million, something that could cost the state billions of dollars — plus expanded sales tax kickbacks and funneling some of the remaining payments in lieu of property taxes to broad property tax relief — and instead just carve out a single-use subsidy that would still cost the state billions of dollars, but fewer billions.

One problem is that a bunch of that stuff was added to the bill by the state house because legislators there didn’t want to be seen as just opening the state’s wallet for the Bears — though adding more goodies for other developers and handing out a few dollars apiece in tax rebates for all property owners would only make the bill more costly and could ultimately force more tax hikes elsewhere. (Interestingly, Crain’s notes that the Bears owners themselves opposed the tax relief provision, because it “would incentivize local taxing authorities to push for a higher annual payment” by the team in order to have something to dole out to homeowners.) A Bears-only bill “is more viable in the Senate than the House,” says Crain’s (citing “sources familiar with the talks”), leaving the possibility that the senate could revise the bill to gain passage there, but couldn’t win the support of the house in reconciliation talks.

Meanwhile, the bill’s chief house sponsor, Kam Buckner, lashed out at Cook County treasurer Maria Pappas’s office for its analysis of the megaprojects bill, calling it “field-of-dreams budgeting” and “fantasy accounting” because “you can’t count full tax revenue from a project that doesn’t exist. … The real choice is not ‘full taxes versus reduced taxes.’ The real choice is a negotiated payment on a real project, or full taxes on an empty lot. Nothing from nothing leaves nothing.”

This is a common argument for development subsidies — there’s nothing there now, so getting any taxes at all from the site is better than nothing — but it overlooks two massive issues. The first is that developments come not only with benefits but with costs — roads for its occupants to drive on, police and fire services to protect it, schools for its residents’ kids to go to — and that’s precisely what property taxes are meant to cover. If you allow a developer to erect a bunch of buildings and not pay for the associated costs, somebody else has to cover those, which means either increased taxes for other residents (bye-bye, tax relief) or cuts to other services.

The second issue is opportunity cost: One advantage of a vacant lot is you can still build something on it, whereas a developed site is as developed as it’s ever going to get. As the treasurer’s report noted, there are plenty of non-subsidized projects like shopping malls that generate economic activity while still paying their taxes, and every time you use up another lot on a tax-limited project, that’s one you can’t use on one that’ll pay its full weight. Buckner should know this: He represents a district in Chicago, which in the first decade of this century became the poster child for carving up its tax base into Swiss cheese to promote development, leaving gaping budget holes as a result.

And that’s where things stand right now, on Thursday morning. Though Capitol News Illinois editor Jerry Nowicki just chimed in with a video interview where he said his reporters talked to Gov. JB Pritzker and he “seemed optimistic” about passage of a bill, for whatever that’s worth. There’s also still the question of whether the Illinois legislature will provide $855 million in infrastructure funding, mostly for transit upgrades, before team execs have provided a traffic plan explaining why they need $855 million, something senate bill sponsor Bill Cunningham has said is unacceptable. I’ll update this post later today on the off chance we get any more clarity on what’s going on in Springfield; stay tuned, but don’t get your hopes up.