Tax Increment Financing
What is Tax Increment Financing (or TIF)?
Tax increment financing is a financial tool widely used by local governments to promote economic development and redevelopment. The TIF process splits tax revenue generated from properties located within the TIF district into two components: Base Revenue and Incremental Revenue
The Base Revenue is the taxable value of a property before the TIF district is established.
The Incremental Revenue is the new taxable value, in excess of the base revenue, each year thereafter.
Tax Increment Financing is the revenue that results from a change in the taxable value of a property. A change in taxable value could be due to a Sale of Property/Change of Ownership or Major Renovations/Improvements.
EXAMPLE: 2010 Taxable Value = $ 50,000
2011 Taxable Value = $ 60,000
Taxable Value Increment = $ 10,000
****THIS IS NOT A TAX INCREASE OR A NEW TAX!!****
What can TIF money be used for?
Some eligible uses are - Road Improvements
- Streetscape (Lighting, Benches, drinking fountains, etc.)
- Property Improvements
- Parking Facilities
Every dollar of TIF revenue is tracked and attached to a cost associated with implementing elements of the Development Plan.