Tax Increment Financing (TIF) is an economic development tool used to promote private sector investment.
Prior to 2008, the City of Overland Park has not used TIF financing as an economic development tool. However, given expanded redevelopment needs and a more difficult commercial development environment, the city has begun exploring the use of economic development incentives.
- Approved redevelopment projects using TIF funding:
Tax Increment Financing is a tool to use future gains in taxes to finance the current improvements that will result in those gains.
TIF is designed to channel funding toward commercial improvements in distressed or underdeveloped areas where development/redevelopment may not otherwise occur.
When a project (new or rehabilitated buildings) is developed, there is an increase in the value of the property. This increased site value and investment creates more taxable property, which increases tax revenues. The increased tax revenues are the "tax increment." TIFs dedicate the increased revenue to finance debt issue to pay for part or all of the improvement project.
TIFs do not result in increased property tax rates or increased sales tax rates.