According to the Office of the State Auditor, TIF is a financing tool created by the Legislature to support local economic development, redevelopment and housing development. As its name suggests, TIF finances development activity by “capturing” the incremental property taxes generated by the increased value of the new development. The capture of tax increments occurs within TIF districts that are comprised of parcels on which development activity occurs.
Without development, there is no increment. Once development occurs, tax increment is a revenue stream that can be used to finance a project directly or to reimburse qualifying expenditures. Tax increment expected in the future can be pledged to a bond that is used to pay for development in the present. Per M.S. 469 – The County auditor shall annually certify the captured NTC to the authority each year.