No. TIF project costs are paid solely from the incremental tax revenues resulting from the redevelopment, not from the municipality’s general fund. The revenue stream may be used to reimburse the developer on a “pay-as-you-go” basis or to repay bonds issued by the TIF Commission. The risk lies with the developer who has invested in the project and relies upon the repayment through the TIF.
The “but for” test is a required statutory finding that each governing body must make for each redevelopment plan. Simply stated, the governing body must find that the redevelopment area has not been subject to growth and development through private investment and is not reasonably anticipated to be developed “but for” the adoption of tax increment financing. In order to make this finding, there must be detailed evidence of the factors that supports the finding and a signed affidavit of the developer attesting to the conditions supporting this finding.

All reasonable or necessary costs incidental to the redevelopment plan or project, such as

  • Costs of studies, surveys, plans and specifications
  • Professional service costs, including, but not limited to, architectural, engineering, legal, marketing, financial, planning or special services
  • Property assembly costs, including, but not limited to, acquisition of land and other property, real or personal or rights or interests therein, demolition of buildings, and the clearing and grading of land
  • Costs of rehabilitation, reconstruction, or repair or remodeling of existing buildings and fixtures
  • Costs of construction of public works or improvements
  • Financing costs, including but not limited to, all necessary and incidental expenses related to issuance of obligations, and which may include payment of interest
  • All or a portion of a taxing district’s capital costs resulting from the redevelopment project necessarily incurred in furtherance of the objectives of the project
    Relocation costs
  • Costs of studies, surveys, plans and specifications
  • Professional service costs, including, but not limited to, architectural, engineering, legal, marketing, financial, planning or special services
  • Property assembly costs, including, but not limited to, acquisition of land and other property, real or personal or rights or interests therein, demolition of buildings, and the clearing and grading of land
  • Costs of rehabilitation, reconstruction, or repair or remodeling of existing buildings and fixtures
  • Costs of construction of public works or improvements
  • Financing costs, including but not limited to, all necessary and incidental expenses related to issuance of obligations, and which may include payment of interest
  • All or a portion of a taxing district’s capital costs resulting from the redevelopment project necessarily incurred in furtherance of the objectives of the project
    Relocation costs
In all cities and counties, the governing body creates the TIF Commission. St. Louis County and cities in St. Louis County have 12 member TIF Commissions comprised of 6 members appointed by the governing body, 3 members appointed by St. Louis County, 2 by the school boards of the affected school districts and, and 1 member appointed by the other taxing districts who levy ad valorem taxes. All other counties and the City of St. Louis have 9 member TIF Commissions comprised of 6 members appointed by the governing body, 2 by the school boards of the affected school districts and 1 member appointed by the other taxing districts who levy ad valorem taxes. All other cities have 11 member TIF Commissions which are comprised of 6 members appointed by the governing body, 2 members appointed by the affected county, 2 by the school boards of the affected school districts and 1 member appointed by the other taxing districts who levy ad valorem taxes.

Yes. According to the Missouri Department of Economic Development through 1997, 38 cities had approved 94 projects and 3 counties had approved 4 projects. Kansas City had the highest number of projects at 30, while several cities had only one project. The list of cities and counties currently using TIF is as follows:

Bel-Ridge
Belton (2)
Blue Springs
Boonville
Brentwood
Bridgeton
Cameron
Cape Girardeau County
Carthage
Chesterfield
Cole County
Crestwood
Creve Coeur
Des Peres
Eureka (2)
Excelsior Springs (2)
Fenton (2)
Grandview (4)
Hazelwood (2)
Hermann
Independence (9)
Jackson County (2)
Jennings
Kansas City (37)
Kearney
Kirksville
Kirkwood
Lee’s Summit (2)
Maplewood (2)
Maryland Heights
Mexico (2)
Monett
O’Fallon
Ozark
Richmond Heights
St. Charles (6)
St. John (2)
St. Louis
St. Peters (2)
Sunset Hills
Trenton
University City
Waynesville
West Plains (5)

The local governing body makes this determination based upon the recommendation of the TIF Commission.
No. This development is occurring in areas of the community that would not otherwise develop without the TIF assistance. This is called the “but for” test. The developer must certify by sworn affidavit and the governing body must find that the proposed development would not occur “but for” TIF assistance. The areas that qualify for tax increment financing must be a blighted area, conservation area or economic development area. The community must include this determination in their findings. Therefore, since the area benefiting from the TIF assistance would not have otherwise developed, the affected taxing districts actually will receive substantial revenue from property that previously generated little or no taxes upon dissolution of the Redevelopment Area. In addition those taxing districts which levy economic activity taxes (such as sales or earnings taxes), will receive 50% of the new taxes generated by the redevelopment project. At the same time, areas that do not qualify for TIF assistance will continue to develop and the taxes generated will continue to go to the county and other taxing jurisdictions.
No. School districts continue to receive all of the tax revenue that they received before approval of a TIF redevelopment plan and projects. TIF uses only those incremental tax revenues that exist because of the new project(s) enabled by the TIF assistance. Also, most school districts are protected from the impacts of TIF-enabled growth by the state’s school district funding formula. The school districts state aid is based upon a formula which incorporates the amount of ad valorem tax received and is raised or lowered in an inverse relationship to a decrease or increase in the ad valorem tax revenue received, the creation of a TIF project area is actually revenue neutral to most of the school districts.
No. TIF is not a tax abatement program. All property owners and business located in a TIF project area must pay the same amount of taxes that would have been paid if the area was not a TIF project. The TIF designation does not reduce the amount of taxes collected, it instead alters the distribution of the tax revenue stream. The taxes existing prior to TIF designation continue to flow to the taxing districts that previously receive those tax dollars. The incremental taxes, the difference between the amount of taxes paid in a TIF project area in the year prior to the establishment of the TIF project area and future years, are set aside in a special allocation fund to either reimburse the developer for amounts expended to construct certain authorized improvements or to make periodic payments to retire the TIF bonds issued to pay for those improvements.
The public is invited to participate in the redevelopment plan and redevelopment project approval process. Notices of the public hearing are published twice in the local newspaper, the first time not more than thirty days and the second time not more than ten days prior to the public hearing. Notices are also sent by certified mail not less than ten days prior to the public hearing to all persons in whose name the general taxes for the last preceding year were paid. The notice includes the time and place of the public hearing, general boundaries of the proposed area, a description of the proposed redevelopment plan and an invitation to all interested persons to comment. Interested persons may file with the commission written objections to, or comments on, and may be heard orally in respect to any issues embodied in the notice.
A redevelopment plan is the comprehensive program of a municipality to eliminate those conditions causing blight or addressing infrastructure needs for economic development through the provision financial assistance and/or use of eminent domain. The redevelopment plan applies to an area designated by the municipality. The municipality must make a finding that there exist conditions which cause the area to be classified as a blighted area, a conservation area or an economic development area. Redevelopment projects are any development project within a redevelopment area in furtherance of the objectives of the redevelopment plan. The redevelopment projects are legally described areas located within the larger envelope of the redevelopment area and it is the redevelopment projects which are the source of the incremental tax revenues.
Proposals for may either come from a developer seeking assistance or a community seeking to encourage redevelopment. All plans and projects must meet certain requirements set forth in the state statute in order to be considered for approval.

The municipality must make a series of findings in order to adopt a redevelopment plan. The municipality must find that:

  • The redevelopment area on the whole is a blighted area, a conservation area, or an economic development area, and has not been subject to growth and development through investment by private enterprise and would not reasonably be anticipated to be developed without the adoption of TIF
  • The redevelopment plan conforms to the comprehensive plan for the development of the municipality as a whole
  • The estimated dates, which shall not be more than 23 years from adoption of the ordinance approving a redevelopment project within a redevelopment area, of completion of any redevelopment project and retirement of obligations incurred to finance redevelopment project costs have been stated, provided that no ordinance approving a redevelopment project shall be adopted later than ten years from the adoption of the ordinance approving the redevelopment plan under which such project is authorized and provided that no property for a redevelopment project shall be acquired by eminent domain later than five years from the adoption of the ordinance approving such redevelopment project
  • A plan has been developed for relocation assistance for businesses and residences
  • A cost-benefit analysis showing the economic impact of the plan on each taxing district that is at least partially within the boundaries of the redevelopment area. The analysis shall show the impact on the economy if the project is not built, and is built pursuant to the redevelopment plan under consideration. The cost-benefit analysis shall include a fiscal impact study on every affected political subdivision, and sufficient information from the developer for the commission establish pursuant to the state statute to evaluate whether the project as proposed is financially feasible
  • A finding that the plan does not include the initial development or redevelopment of any gambling establishment; provided, however, that this subdivision shall be applicable only to a redevelopment plan adopted for a redevelopment area designated by ordinance after December 23, 1997
Tax increment financing (TIF) is an economic development tool authorized by Missouri statutes at 99.800 R.S.Mo. It allows cities and counties to encourage development in areas of the community that would not otherwise develop or redevelop “but for” TIF financial assistance some type of financial assistance. The financial assistance under TIF is the ability to use a portion of the new property taxes, sales, earnings and other locally collected taxes resulting from the new development to pay for certain authorized improvements. Existing taxes are not impacted. Because of the Federal government’s policy shift in the 1980’s, funding for the redevelopment costs is no longer available from the Federal government except for those cities which already experience severely distressed conditions. TIF is now one of the few sources of redevelopment financing assistance available to local governments. The creation, approval and implementation of redevelopment plans and projects are entirely under local control and local responsibility.

Prior to commencing work on a redevelopment project, a developer may request consideration by the TIF Commission to consider approval of a Redevelopment Plan and Redevelopment Project to assist in the financing, including issuance of bonds, and/or acquisition of property. The TIF Commission, after providing the required notices twice in the newspaper and once by certified mail to property owners within the redevelopment area, will hold a public hearing at which the Commission takes public testimony, receives testimony and makes certain findings.

The TIF Commission may continue or close the public hearing. Once the public hearing has been closed, the Statutory Commission must within 30 days make such findings as may be appropriate and vote to recommend to the governing body approval or disapproval of the proposed plan. If the Commission recommends approval, an ordinance shall be introduced in the governing body within fourteen to ninety days. If the recommendation is not to approve the proposed TIF plan, notice is to be forwarded to the governing body within 90 days.

No. Approval of a Tax Increment Financing Plan is not a tax rate increase. The incremental taxes referred to in the name are those new property taxes resulting from construction or rehabilitation of buildings, new earnings taxes resulting from increased construction or rehabilitation of buildings, new earnings taxes resulting from increased employment on the site, and sales taxes resulting from new retail activities on the site. It is these new taxes that are used to pay for development costs.
Yes. Today over 47 states use TIF to some extent, including all states bordering Missouri.
A pay-as-you-go project is one where the developer assumes all of the risk by self-financing of the improvements. In these types of projects, the developer is repaid on a periodic basis when the project generates increment. A project financed with TIF bonds is generally one where the costs of public improvements and/or developer reimbursable costs are financed by the issuance of revenue bonds. The debt is then retired solely from the tax increment derived from the project. These are not obligations of the City or County.