Tax Increment Financing (TIF)
Definition
A development tool where future property tax increases from a project are used to finance current improvements. The area is designated a TIF district, and the ‘increment’ (tax increase from new development) goes back into the district rather than the general fund for a set period (usually 20-30 years).
Louisville Context
Louisville has dozens of TIF districts, diverting millions in property tax growth away from schools, police, and other services. While TIFs can spur development, they’re often approved for areas that would develop anyway—essentially giving away future tax revenue. Dave’s plan requires: (1) TIFs only for truly blighted areas, (2) sunset provisions (TIFs expire after 20 years), (3) public benefit requirements (affordable housing, living wages), (4) annual reporting on tax revenue diverted.
Why It Matters
TIFs sound technical but they’re huge: they can divert $50-100 million over 20 years away from schools and services. Developers love TIFs because they shift costs to taxpayers. Without accountability, TIFs become corporate welfare disguised as development tools.
Dave’s Proposal
Strict TIF approval criteria: (1) must demonstrate actual blight, (2) required living wage and affordable housing components, (3) 20-year maximum term, (4) annual public reporting on diverted revenue.