About TIF

Municipalities in Illinois and across the nation are faced with numerous challenges, not the least of which is encouraging economic growth in blighted, decaying, and underperforming areas in need of development or redevelopment.

Most often improving these areas requires a public investment to reduce the extra cost and risk that private development faces in such areas. The public wishes to see this development occur, but without increased taxes or the reduction of other necessary services and projects that would be required to pay for the public investments that development and redevelopment usually require.

One tool successfully in use in Illinois and 48 other states to meet this economic development challenge is Tax Increment Financing: or TIF. With this development tool, financially strapped local governments can make the improvements they need, like new roads or sewers, and provide incentives to attract new businesses or help existing businesses stay and expand. And TIF does this without tapping into general municipal revenues or raising taxes.

Since the Federal and State governments have greatly reduced their support for local economic development, Tax Increment Financing helps local governments attract private development and new businesses using local resources that do not depend upon an increase in taxes or the reduction of other services. New development and businesses mean more jobs, more customers, and, in turn, more private investment for areas most in need. TIF projects also help retain existing businesses that might consider relocating away from declining areas. These jobs and investment — public and private — mean more revenue to help a community meet its other needs. As a result, the community as a whole, not just the area targeted for TIF revenues, improves.