What is tax increment financing?

Tax increment financing is a tool for local economic development that authorizes a TIFA to capture a portion of the property taxes levied by other taxing units (the City, County, WCCC, HCMA, Wayne RESA, etc.) and use those revenues for economic development purposes.

Basically, once a tax increment financing plan has been approved by the City Council, the property values of the properties covered by the tax increment financing plan are, in effect, frozen for the other taxing units. The other taxing units continue to receive the same amount of tax revenues from those properties for the life of the TIFA Plan. The tax revenues received from those properties in future years which are in excess of the tax revenues on the base value are turned over to the TIFA in order to further implement the projects in the TIFA Plan. Thus, the TIFA gets to capture the incremental increase in the property tax revenues over the amount of revenues in the base year.

Show All Answers

1. What is the TIFA?
2. What does the TIFA Do?
3. How does the TIFA pay for its activities?
4. What is tax increment financing?
5. Can the TIFA levy taxes on property?
6. Do property owners in the TIFA pay more in taxes than property owners outside the TIFA?
7. Is the TIFA totally independent from the City?
8. Do other communities use TIFAs? What types of projects have been paid for by TIFAs?