Editing Tax increment financing (section)

{{Short description|Public financing method}}

'''Tax increment financing''' ('''TIF''') is a [[public financing]] method that is used as a [[subsidy]] for [[redevelopment]], infrastructure, and other community-improvement projects in many countries, including the [[United States]]. The original intent of a TIF program is to stimulate private investment in a blighted area that has been designated to be in need of economic revitalization.<ref>{{Cite book|title=Encyclopedia of the City|last=Caves|first=R. W.|publisher=Routledge|year=2004|isbn=978-0-415-86287-5|page=659}}</ref>   Similar or related [[value capture]] strategies are used around the world.

Through the use of TIF, municipalities typically divert future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community. TIF subsidies are not appropriated directly from a city's budget, but the city incurs loss through forgone tax revenue.<ref name="TIF-Subsidized" /> The first TIF was used in California in 1952.<ref name="True Costs of TIF" /> By 2004, all U.S. states excepting Arizona had authorized the use of TIF. The first TIF in Canada was used in 2007.<ref name="CRL as developer subsidies" />[[File:TIF graph.pdf|thumb|300px|If the cost of basic services increases, with TIF in place, the result is a revenue shortfall that has to be paid from sources other than tax revenues of the TIF district to prevent service cuts.]]