Assessing the Impacts of Tax Increment Financing (TIF): A Collaborative Approach to Economic Development Policy Research George H. Rafael Thomas G. Johnson, PhD James K. Scott, PhD

INTRODUCTION Missouri TIF Legislation The Need for Collaboration How TIF Works in Missouri The Problems and A Research Framework Simulation Results and Discussion

BENEFITS OF COLLABORATION STATE AGENCY University brings research skills and experience University offers independence and objectivity UNIVERSITY Opportunity to conduct research Exposes students to real world Opportunity for public service experience

How TIF Works ARGUMENTS PROS Spurs economic development Finances needed infrastructure Eventually increase revenues to local governments CONS Municipalities capture tax revenues from other jurisdictions Often used in growing and prosperous areas Wastes scarce public resources

A Hypothetical Case

Perverse Incentives Over-use TIF Funds Displace Expenditures from the General Fund Create TIFs in Areas with Growing Tax Bases Make TIFs as Large as Possible Use TIF to Support Retail Development Limit Public Participation

Research Issues What is “Blighted”? “But For…” Baseline Assumptions Displacement Other

Research Plan Inventory Missouri TIF Projects Develop TIF Impact Simulator Models Generate Baselines for all Affected Jurisdictions Establish Criteria and Procedures to Evaluate TIF Impacts Involve Local Decision Makers in TIF Assessments