Luuk Huttenhuis
Home University: University of Groningen (RUG)
Host University: University of Illinois at Urbana-Champaign (UIUC)
Contact Information: [email protected]
The effect of Tax Increment Financing on the economic development of Champaign, Illinois
Economic development has been an important part of history in U.S. cities (Feiock 1999). Tax abatements, industrial parks, , land assembly, and infrastructure investment are different tools which local governments can use for stimulating economic development (Reese, Ye 2011). Within this large arsenal of tools Tax Increment Financing (TIF) is an important and widely used method (Brueckner 2001). TIF is used in 49 states and the District of Columbia and is one of the first tools local governments use for economic development (Briffault 2010, Krohe, 2001). TIF allow city governments to finance projects within the district without raising tax or a direct subsidy from a higher government (Dye, Merriman 2000, Brueckner 2001).The original goal of TIF is stimulating underdeveloped areas but recently the focus shifted to the creation of jobs, raising property values and the attraction of businesses (Byrne, 2009). However TIF is also seen as controversial and is mainly popular because of its flexibility and autonomy in planning and decision making (Briffault 2010, Weber, Goddeeris 2007). Secondly effects on property values, new jobs and growth in the district itself or surrounding areas are not clear and inconsistent. This study will evaluate the cost effectiveness of a TIF and will evaluate the true cost of this policy. A statistical analysis tries to determine the real EAV growth on properties within the TIF zone and tries to discover the real effect for property growth in Champaign. In the end this study will contribute to the large literature on TIF zoning with an in depth view in Champaign TIF policy.
Host University: University of Illinois at Urbana-Champaign (UIUC)
Contact Information: [email protected]
The effect of Tax Increment Financing on the economic development of Champaign, Illinois
Economic development has been an important part of history in U.S. cities (Feiock 1999). Tax abatements, industrial parks, , land assembly, and infrastructure investment are different tools which local governments can use for stimulating economic development (Reese, Ye 2011). Within this large arsenal of tools Tax Increment Financing (TIF) is an important and widely used method (Brueckner 2001). TIF is used in 49 states and the District of Columbia and is one of the first tools local governments use for economic development (Briffault 2010, Krohe, 2001). TIF allow city governments to finance projects within the district without raising tax or a direct subsidy from a higher government (Dye, Merriman 2000, Brueckner 2001).The original goal of TIF is stimulating underdeveloped areas but recently the focus shifted to the creation of jobs, raising property values and the attraction of businesses (Byrne, 2009). However TIF is also seen as controversial and is mainly popular because of its flexibility and autonomy in planning and decision making (Briffault 2010, Weber, Goddeeris 2007). Secondly effects on property values, new jobs and growth in the district itself or surrounding areas are not clear and inconsistent. This study will evaluate the cost effectiveness of a TIF and will evaluate the true cost of this policy. A statistical analysis tries to determine the real EAV growth on properties within the TIF zone and tries to discover the real effect for property growth in Champaign. In the end this study will contribute to the large literature on TIF zoning with an in depth view in Champaign TIF policy.