Best Of Tax Increment Finance References

Tax Increment Financing (TIF) Public Financing Types of TIF from planningtank.com

Exploring Tax Increment Finance in 2023

What is Tax Increment Finance?

Tax Increment Finance, commonly known as TIF, is a public financing tool used to stimulate economic development in a specific area or project. The concept behind TIF is that it allows local governments to invest in public infrastructure or redevelopment projects by capturing the increased property tax revenue generated as a result of the development.

How does Tax Increment Finance work?

When a TIF district is created, the property values within that district are frozen at their current levels. Any increase in property value or tax revenue generated as a result of new development or redevelopment is captured by the local government and used to fund the project or infrastructure improvements.

The Benefits of Tax Increment Finance

TIF has been widely used by municipalities to spur economic development in blighted or underutilized areas. By providing a financial incentive for developers to invest in these areas, TIF can lead to the creation of new jobs, increased property values, and a stronger tax base for the community.

The Drawbacks of Tax Increment Finance

Critics of TIF argue that the increased tax revenue generated by new development is often overstated and that TIF can lead to a shift in tax burden from developers to other taxpayers in the community. Additionally, TIF can sometimes be used to fund projects that do not necessarily benefit the entire community.

Examples of Tax Increment Finance in Action

One example of TIF in action is the redevelopment of Chicago's Navy Pier. The project, which was completed in 2016, was partially financed through TIF. The redevelopment included the construction of a new 200-room hotel, a new park, and a major renovation of the pier's existing facilities. Another example is the redevelopment of Detroit's Woodward Corridor. The project, which was completed in 2018, was partially financed through TIF. The redevelopment included the construction of new retail and residential space, as well as improvements to public transportation in the area.

The Future of Tax Increment Finance

As cities and municipalities continue to seek ways to stimulate economic development, it is likely that TIF will continue to be a popular financing tool. However, as with any public financing tool, it will be important for local governments to carefully consider the potential benefits and drawbacks of TIF before implementing it in their communities.

Conclusion

Tax Increment Finance is a powerful tool that can be used to stimulate economic development in blighted or underutilized areas. While there are potential drawbacks to TIF, it has been successfully used in communities across the country to create new jobs, increase property values, and strengthen local economies. As we look to the future, it will be important for policymakers to carefully consider the potential benefits and drawbacks of TIF before implementing it in their communities.

Share :