Tax Increment Financing (TIF) is a public financing method that is used for subsidizing redevelopment, infrastructure and other community-improvement projects in many states. TIF can help finance public infrastructure, land acquisition, demolition, utilities and planning costs, and other improvements including:

  • Sewer expansion and repair
  • Curb & sidewalk repair
  • Storm drainage
  • Traffic control
  • Street construction expansion
  • Street lighting
  • Water supply improvements
  • Landscaping
  • Park improvements
  • Environmental remediation
  • Bridge construction & repair
  • Parking structures

TIFs help local governments attract private development and new businesses. New businesses mean more jobs, more customers, and, in turn, more private investment.

Benefits of a TIF

TIF designation also helps retain existing businesses that might otherwise find more attractive options elsewhere. Sales tax revenue may also increase and jobs and additional investment (private and public) mean more money for the community. TIF helps to overcome the extraordinary costs that often prevent development and private investment from occurring on certain properties and restore the property, which in turn compels property values to increase, thereby expanding the tax base even further.

In a TIF district, funds for necessary remediation or improvements are generated by the businesses, new and old, attracted by the TIF benefits. Specifically, money for infrastructure improvements and other incentives comes from the growth in sales tax revenues, called the tax increment.

TIF’s create short and long term benefits for communities. TIF benefits include:

  • No tax increases
  • Increased property values
  • Private investment and development
  • New jobs
  • Job retention
  • Stronger, broader tax base
  • Stronger economic base
  • Locally controlled development with State oversight
  • Incremental revenue reinvested into the TIF district
  • Stimulates investment outside TIF district boundaries