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 2008 TIF Report on the OSA website
Table 1 shows the amount of captured net tax capacity in city-authorized TIF districts (by economic development region).
*Cities in Blue Earth County (Region 9) are excluded from this analysis as Fully Taxable NTC data was not available.
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 TIF districts at the time was included in the ability to pay measure.
Table 2 shows the total amount of 2009 NTC that will be included in tax rolls (by estimated year of decertification).
**Does not include districts that have decertified and no longer receive tax increments. The remaining 5 districts must continue to report until their fund balance is zero.
Source: Tax capacity and decertification data from the Minnesota Department of Revenue.
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