Tax Increment Financing
The purpose of this guide is to describe the criteria for the use of Tax Increment Financing (TIF) and the procedures which will be used for evaluating proposals requesting TIF.
What is TIF?
Tax Increment Financing is a public financing method which has been used for redevelopment and community improvement projects in many countries including the United States for more than 50 years. With the federal and state sources for redevelopment generally less available, TIF has become an often-used financing mechanism for municipalities. Similar or related approaches are used elsewhere in the world.
TIF in Nebraska is primarily designed to finance the public costs associated with a private development project. Essentially, the property tax increases resulting from a development are targeted to repay the public investment required by a project.
TIF provides a means of encouraging private investment in deteriorating areas by allowing city governments to devote all property tax revenue increases to repay the public investment needed to attract development. Nebraska voters approved community tax increment finance (then known as community improvement financing) in November 1978 and the Unicameral passed enabling legislation in 1979. The legislature revised the TIF statutes over the years. Currently, 45 other states have authorized TIF.