Tax increment financing
Public financing method / From Wikipedia, the free encyclopedia
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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.[1] 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.[2] The first TIF was used in California in 1952.[3] By 2004, all U.S. states excepting Arizona had authorized the use of TIF. The first TIF in Canada was used in 2007.[4]