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Quote/Term of the Week

TIF surplus & TIF sweep / noun

When a Tax Increment Financing (TIF) district has generated more money than the city has committed for approved projects. Each year, officials move some of that extra money — a.k.a. a “sweep” — to cover expenses in local governmental budgets.

Ex: Chicago has just over $1 billion in TIF surplus funds for 2026. The TIF sweep sends approximately $232.6 million of that money to the city of Chicago’s budget.

Bring in the broom

There are a lot of moving pieces in the 2026 budget, as well as the reshuffling of fines, fees and taxes to fund the city’s services. 

One example: TIF sweeps, or using excess Tax Increment Financing (TIF) dollars to plug holes in local budgets, including for Chicago Public Schools and the city itself.

Let’s break it down:

TIFs, and TIF districts are a complex aspect of Chicago’s tax structure. They are supposed to isolate and dedicate a portion of one area’s property tax collections to fund economic developments and infrastructure projects in a geographic area that is considered “blighted” or in danger of blight. 

Under state law, any excess funds from TIF districts must be released annually and distributed to other local government entities, which includes Chicago Public Schools. Every year, the city calculates the excess funds for each TIF district based on the total amount of money not obligated for each of the projects. That extra money is then absorbed by local budgets. 

This year, of the record $1 billion TIF surplus, CPS gets $552.4 million; the city of Chicago gets $232.6 million. The Park District, City Colleges and other Cook County agencies get the rest. This process is known as a “TIF sweep.” (There are some exceptions to these rules. For example, smaller neighborhood TIFs that don’t collect a lot of money aren’t “swept.”)

Chicago has a controversial history about how the city uses TIF funds and the annual surplus.

In 2019, protests and legal battles ignited over Sterling Bay’s $6 billion Lincoln Yards development project. Advocacy groups sued over the city’s plan to contribute $1.3 billion in TIF funds to the project sitting on 55 acres across Lincoln Park and Bucktown. Advocates argued the mega development “subsidizing luxury projects in wealthy areas” rather than helping struggling communities. The project ultimately failed as the developer gave up or sold most of the land.

TIF sweeps happen every year, but the issue was particularly controversial in this year’s contentious budget battle. 

In 2025, City Hall changed the rules for what qualifies as a surplus. In previous years, alders could indefinitely hold TIF dollars meant for projects still in the planning stages. Now, alders can only call dibs on money for projects that are nearly ready to be submitted for city review, and they can only hang onto that money for up to a year, according to the Civic Federation, a non-partisan governmental research organization. 

Some alders felt TIF sweeps in their wards would siphon money away from key projects, while city officials insisted those districts are continuing to generate money that will replenish those funds for future projects.

The Civic Federation also has criticized the city’s pattern of taking more money from TIF sweeps, saying the city is increasingly leaning on one-time sources of cash instead of creating a steady revenue stream to support the budget. 

What you can do:

Catch up on the headlines & history:

  • Chicago Board of Education approves agreement for controversial pension payment but with a big caveat | WBEZ

  • Chicago’s 2026 city budget proposal includes $552 million for CPS | Chalkbeat Chicago

  • Record $1B TIF surplus emerges as key point of friction in Mayor Johnson's proposed 2026 budget | Sun-Times 

  • Mayor Brandon Johnson faces complaints about property tax sweep plan to balance budget | Chicago Tribune 

  • Understanding Chicago’s 2026 Record TIF Surplus | Civic Federation

A version of this story was first published in the February 4, 2026 issue of the Newswire, an email newsletter that is your weekly guide to Chicago government, civic action and what we can do to make our city great. You can sign up for the weekly newsletter here.

Have thoughts on what you'd like to see in this feature? Email Civic Editor Dawn Rhodes at dawn@citybureau.org.