A tool that redirects a portion of a business's property taxes to the benefit of the business. As the property value increases for a TIF-designated business, the taxes generated by this value "increment" go toward paying the debt incurred for capital (property) improvements made to the area where a business is located, rather than having it go to the general funds of various taxing authorities like cities and school districts.
Tax increment financing (TIF) funds are allocated to a designated project area from an increase in the tax revenue generated by the increased value of the properties located within the project area. The TIF revenue provides a cash flow to fund public improvements on a year-by-year basis, and/or amortize bonds which have been issued to capitalize development programs within the renewal area. Priority has been given to utilize income to develop projects on a "pay-as-you-go" basis.
(TIF): A mechanism that allows local governments to use future projected taxes to finance current infrastructure investments.
A public financing tool whereby revenue bonds are issued to pay for the improvement of, or provision of, new public infrastructure in a defined area necessary to support and encourage its development. The community assumes the debt obligation. The assessed value of property in the defined area is frozen for a specific period for the general revenue purposes of the community, and the additional taxes generated by the increased valuations in the district created by the development are used to amortize the bonding. A "but for" test is generally required
Method of financing redevelopment through redirecting incremental tax revenues from other taxing agencies to the Redevelopment Agency for a specified time period.
A program designed to leverage private investment for economic development projects in a manner that enhances the benefits accrued to the public interest.
A public financing tool used to assist economic development projects by capturing the projected property tax revenue stream to be created by the development and investing those funds in improvements associated with the project.
Taxes on the increased or incremental value of the assisted property are captured for a limited time and used to pay debt service costs on any debt that was incurred to finance those development costs.
Tax Increment Financing, or TIF, is a tool for redevelopment and community improvement projects throughout the United States for more than half a century. With federal and state sources for redevelopment generally less available, TIF has become an often-used financing mechanism for municipalities. Similar or related approaches are used elsewhere in the world.
