Start Date
11-12-2015 9:30 AM
End Date
11-12-2015 10:30 AM
Description
This paper will be drawn from a Policy Focus Report about tax increment finance (TIF) being prepared for the Lincoln Institute of Land Policy. Policy Focus Reports present comprehensive and balanced summaries of differing viewpoints on timely policy issues. The report will explain the mechanics of TIF and rationale for its use and will discuss where and how TIF has been used with emphasis on differences across regions. The impact of the Great Recession and California’s decision to end TIF in 2011 will be covered. Since TIF funds are sequestered in off-budget accounts they may get less scrutiny than other expenditures. The report discusses this lack of transparency and attempts to remedy it. Academic literature about TIF and economic development will be reviewed with attention to the impact of TIF on property values and employment. A separate section will review evidence about the alleged negative effects of TIF including TIF’s potential to 1) encourage a race to the bottom among competing governments, 2) divert revenues from overlying governments, 3) displace low-income residents and 4) tilt the playing field in favor of large businesses. Case studies of TIF districts in several areas of the country will illustrate salient points.
Recommended Citation
Merriman, David PhD, "When is tax increment financing useful?" (2015). IAAO Annual Legal Seminar. 10.
https://researchexchange.iaao.org/legal/legal15/sessions/10
When is tax increment financing useful?
This paper will be drawn from a Policy Focus Report about tax increment finance (TIF) being prepared for the Lincoln Institute of Land Policy. Policy Focus Reports present comprehensive and balanced summaries of differing viewpoints on timely policy issues. The report will explain the mechanics of TIF and rationale for its use and will discuss where and how TIF has been used with emphasis on differences across regions. The impact of the Great Recession and California’s decision to end TIF in 2011 will be covered. Since TIF funds are sequestered in off-budget accounts they may get less scrutiny than other expenditures. The report discusses this lack of transparency and attempts to remedy it. Academic literature about TIF and economic development will be reviewed with attention to the impact of TIF on property values and employment. A separate section will review evidence about the alleged negative effects of TIF including TIF’s potential to 1) encourage a race to the bottom among competing governments, 2) divert revenues from overlying governments, 3) displace low-income residents and 4) tilt the playing field in favor of large businesses. Case studies of TIF districts in several areas of the country will illustrate salient points.