I’ll be the first to admit I don’t know everything. Tax increment finance (TIF) is one such area. I like saying TIFs so it would make sense for me to actually understand what a TIF is. This week on The Pete the Planner Radio Show I interviewed Rob Kendall, Brownsburg Councilman, about TIFs. He’s a smart guy, so I’ll shut up and let you hear all the information from him.
TIF stands for Tax Increment Finance.The best way to describe TIFs is to talk about your property tax bill. You may not look at it too closely, but if you did you would find the taxing entities listed out, such as the library, the town of wherever you live, schools, etc. This is where your property tax money goes. In a TIF district, the taxes from commercial properties or any building taxed at 2-3% go into a TIF. The TIF is a specific fund the purpose of which is to pay for large infrastructure projects like laying sewer lines and other necessary projects. The reason TIF districts are so necessary is because in a state where there are property tax caps the general fund will be lacking. If money isn’t raised through TIFs it will be difficult to find or raise the money necessary for infrastructure projects. The TIF committee that manages the funds is also highly accountable. They must reapply and be reappointed every year. And if you don’t like the committee, you can reflect your vote as you elect the mayor and town council members. This is a pretty complex topic and I don’t pretend to be an expert, although Rob did a great job of explaining it. I highly recommend listening to the podcasts above for more information.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.