ABSTRACT
Tax increment financing (TIF) is an economic development tool and financial management strategy used to rehabilitate or enhance essential municipal infrastructure and stimulate economic development. Generally, municipalities implement TIF in an effort to improve blighted areas, attract potential investors for redevelopment, and expand the property tax base by increasing property values within a targeted area. This entry provides a discussion of the mechanics of tax increment financing, why municipalities use tax increment financing, and the controversy surrounding this economic development policy.
