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Tax Increment Financing Done Right

by Miriam - November 24th, 2014.
Filed under: Coffe Break, Insights.

Tax Increment Financing (TIF) is a way of capturing tax dollars from development to pay for the infrastructure needed for that development (roads, water, sewer, subdivision).  It has received bad press recently, and is generally regarded with suspicion, anyway, since it seems like it’s either an additional tax, or “taking away” tax dollars from other budgets, but it’s neither.  TIF captures tax dollars only from new development, and only for a limited time, and has no effect upon the pre-existing property tax base.

Here’s a terrific video that shows how TIF has been successful in commercial, industrial, and residential development, and how, for small and rural communities, it is the only tool that local communities can use to bring in and encourage development.  This video features Tippecanoe County, Indiana, as well as its neighbor county (my home county), Carroll County.  While the video certainly has a promotional feel to it, it is entirely accurate.  I know this because I serve on the local Economic Development Board, and I have seen TIF in action.

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