Tax Increment Financing

About Tax Increment Financing (TIF)

Tax increment financing (TIF), a tool for economic development and urban revitalization, allows local governments to use future projected taxes to finance current improvements.

The full taxes assessed on the property are collected, but the taxes generated by the increase in value of the property (or increment) are earmarked for use within an urban renewal district. Taxes received on the base value continue to be disbursed among all taxing jurisdictions, while taxes on the increment remain with the city or county for use within the urban renewal district.

Tax Increment Financing in Iowa

The Iowa League of Cities published a fact sheet about TIF in Iowa in April 2014.  It summarizes TIF mechanics, legislative history, goals, and statistics on TIF use in Iowa. Check out the TIF Fact Sheet (PDF) for more information.

Tax Increment Financing in Windsor Heights

TIF has been used in Windsor Heights for employment retention and growth, economic growth, and redevelopment, as well as for several other types of infrastructure and community betterment projects.

View a map of Windsor Heights Urban Renewal Areas (PDF).

Economic Growth

The City has accomplished a number of successful economic development projects, such as the redevelopment along 63rd and Hickman and multiple projects in the Town Center. These projects, as well as others, have led to a 60% increase in total taxable and tax increment value in a land-locked community. To encourage such development, the City has utilized tax increment to offer incentives and to undertake investment in City infrastructure. The City’s use of TIF has been and continues to be consistent with best practices and guidance by outside legal and financial advisors.

Economic development has been an increasing source of revenue to the City, with tax increment revenues increasing from over 370% from $505,000 in fiscal year 1998 to a budgeted $1.88 million in fiscal year 2018. In addition to past successes, the City is supporting growth through the sponsorship of grants for eligible economic development.

TIF fuels economic growth throughout the community.