"A Dynamic Simulation of TIF Impacts on Multiple Jurisdictions".

• Position: Review

Cox Anna M.; Mundell, Morgan M.; and Johnson, Thomas G.

Municipal Finance Journal, Spring 2001, Pp. 11-36.

Multiple jurisdictions often are affected when a tax increment finance (TIF) district is implemented. TIF provides one government with the ability to capture and redirect tax revenues to redevelop targeted areas. A result of TIFs is that local governments (typically municipalities) have the power to freeze part of the tax bases in overlapping jurisdictions. This article estimates the fiscal impact of Kirksville, Missouri's TIF district on each of its multiple jurisdictions. A new tool for calculating economic and fiscal changes under natural growth conditions--named the Show Me Model--was implemented to predict changes in economic, social, and fiscal conditions for Kirksville under alternative economic scenarios. Economic and demographic variables were projected at city and county levels to establish what would occur if no policy changes were enacted--referred to as natural growth estimation. Attributes of the TIF district were then calculated for 23 years in the future, the maximum number of years for repayi ng the public investment. Unlike a simple trend analysis in property valuation that fails...