TIF is an economic development tool. When TIF districts are decertified, it can affect a city's tax base and LGA distribution.
TIF decertification and tax base increases
TIF decertification and local government aid (LGA)
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View the Handbook for Minnesota Cities (pdf) for more on TIF
Learn more about the 2007 TIF Report on the OSA web site
Table 1 shows the amount of captured net tax capacity in city-authorized TIF districts (by economic development region).
The increase in tax capacity resulting from decertification can affect a city’s LGA distribution.
Cities with large shares of net tax capacity in TIF districts will likely see a decrease in their LGA distribution when the districts are decertified, as the difference between calculated need and capacity narrows.
Example: Minneapolis would have received 9 percent less certified LGA in 2008 if all tax capacity in current TIF districts was included in the ability to pay measure for cities.
Table 2 shows the total amount of 2008 city NTC that will be included in tax rolls (by estimated year of decertification).
Sources: Tax capacity data from the Department of Revenue and decertification dates from the office of the State Auditor (unaudited data).
*Does not include districts that have decertified and no longer receive tax increments. The remaining 6 districts must continue to report until their fund balance is zero.
Questions about TIF?
Contact Lena Gould
Policy Analyst
(651) 281-1245 or (800) 925-1122
lgould@lmc.org
Contact Rachel Walker
Policy Analysis Manager
(651) 281-1236 or (800) 925-1122
rwalker@lmc.org