What is Tax Increment Financing?
Tax Increment Financing (TIF) is a financial tool used by municipalities to promote economic development and revitalization within a designated area known as a Tax Increment District (TID). When a TID is created, the property tax base within the district is frozen at its current level, known as the “base value.” Over time, as property values within the district increase due to new development and improvements, the additional property tax revenue generated above the base value, called the “increment”, is used to finance public projects and infrastructure improvements within the TID.
This approach allows the Village to invest in projects that support growth, encourage private investment, and create a thriving community, without immediately raising taxes for all residents.
How Does TIF Benefit the Village?
Stimulates Economic Growth: TIF attracts new businesses and encourages redevelopment of underutilized or blighted areas.
Funds Infrastructure & Public Improvements: Revenue from the increment can be used for streets, utilities, public spaces, and other infrastructure, making the area more attractive for private investment.
Job Creation & Increased Tax Base: By encouraging development, TIF helps create new jobs and increases the Village’s long-term tax base.
What is a Tax Increment District (TID)?
A Tax Increment District (TID) is a designated area where the Village uses Tax Increment Financing (TIF) to support development. As new growth occurs within the district, the additional tax revenue it generates is reinvested back into that area to help fund improvements and make projects possible.