tax increment financing

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. Similar or related value capture strategies are used around the world. Through the use of TIF, municipalities can dedicate future tax revenues of a "particular business or group of businesses toward an economic development project in the community." The first TIF was used in California in 1952. By 2004 all 50 American States had authorized the use of TIF. The first TIF in Canada was used in 2007. As the use of TIFs increases elsewhere, in California, where they were first conceived, in 2011 Governor Jerry Brown enacted legislation which led to elimination of California’s nearly 400 redevelopment agencies that implemented TIFs, in response to California's Fiscal 2010 Emergency Proclamation thereby stopping the diversion of property tax revenues from public funding. The RDAs are appealing this decision. TIF subsidies are not appropriated directly from a city's budget, but the city incurs loss through foregone tax revenue.