How does Tax Increment Financing (TIF) work?

Creating an Urban Renewal District allows Oregon cities to collect taxes using Tax Increment Financing (TIF), which creates funding for identified projects without raising taxes. Here’s the City of Bend’s description and graphic:

“Tax Increment Financing (TIF) is a funding strategy designed to implement projects within a designated area. The goal is to make strategic investments that spur development, address blighted conditions, and support property investments that would not have otherwise occurred.

When a TIF district is created, the property tax revenue from that area is diverted into revenue streams:

• Frozen Base: Continues to go to the taxing jurisdictions, such as the city, county, school district.

• Increment: As property values increase over time from new development or appreciation, the increment goes to the TIF District instead of overlapping taxing districts.”