How does TIF work?

• A city designates an area in need of an economic boost as a TIF district.
• On the day of this declaration, the base property value of that district is established.
• All jurisdictions that have taxing authority over property in the TIF district (e.g., the local school district, the county, etc.) retain that authority.
• As properties within the TIF district are developed, the value of property taxes that would have been collected by the taxing jurisdictions is retained by the municipality authorizing the TIF to pay off the costs of readying the district for development.
• After the public investment costs are paid off, the municipality releases those incremental taxes to the other taxing jurisdictions.
• If all goes according to plan, these incremental taxes will be greater that the taxes generated from the district’s original base value.