Editing Tax increment financing (section)

==Use==
Tax increment financing subsidies, which are used for both publicly subsidized economic development and municipal projects,<ref name="TIF-Subsidized" />{{rp|2}} have provided the means for cities and counties to gain approval of redevelopment of blighted properties or public projects such as city halls, parks, libraries etc. The definition of blight has taken on a broad inclusion of nearly every type of land including farmland, which has given rise to much of the criticism. "<ref name="TIF-Subsidized" />{{rp|2}}

To provide the needed subsidy, the urban renewal district, or TIF district, is often drawn around additional real estate beyond the project site to provide the needed borrowing capacity for the project or projects. The borrowing capacity is established by committing all normal yearly future real estate tax increases from every parcel in the TIF district (for 20–25 years, or more) along with the anticipated new tax revenue eventually coming from the project or projects themselves. If the projects are public improvements paying no real estate taxes, all of the repayment will come from the adjacent properties within the TIF district.

Although questioned, it is often presumed that even public improvements trigger gains in taxes above what would occur in the district without the investment. In many jurisdictions yearly property tax increases are restricted and cannot exceed what would otherwise have occurred.

The completion of a public or private project can at times result in an increase in the value of surrounding [[real estate]], which generates additional tax revenue. Sales-tax revenue may also increase, and jobs may be added, although these factors and their multipliers usually do not influence the structure of TIF.

The routine yearly increases district-wide, along with any increase in site value from the public and private investment, generate an increase in tax revenues. This is the "tax increment." Tax increment financing dedicates tax increments within a certain defined district to finance the debt that is issued to pay for the project. TIF was designed to channel funding toward improvements in distressed, underdeveloped, or underutilized parts of a jurisdiction where development might otherwise not occur. TIF creates funding for public or private projects by borrowing against the future increase in these property-tax revenues.<ref>Various, (2001). ''Tax Increment Financing and Economic Development, Uses, Structures and Impact.'' Edited by Craig L. Johnson and Joyce Y. Man. State University of New York Press.</ref>