Is Tax Increment Financing a Fiscal Bane or Boon?

Among urban planners, tax increment financing (TIF) is a popular economic development financing tool. Critics, however, claim that TIF is a fiscal bane, reducing property value for affected jurisdictions, especially school districts. TIF regulations in Iowa-on annual base values, returned excess increments, and protected debt service levy-provide the opportunity to test this argument. Using eighteen years of TIF district-level data, this study finds that TIF was most likely a fiscal boon for school districts. Given this finding, the study also provides several implications for TIF use and economic development planners in Iowa and elsewhere.