Tax Increment Finance District(s)

Tax Incremental Finance (TIF)

What is it?
TIF is a state regulated finance tool municipalities may use to finance infrastructure, encourage development or redevelopment projects that “but for” the financing tool, would not otherwise take place.  

Why use it?
TIF not only helps expand a municipality’s tax base, but also aids business expansion, retention, and encourages orderly development or redevelopment within the city.  Improvements in the area must significantly enhance the overall value of real property within the district.  Project costs must relate directly to eliminating blight, rehabilitation, or conservation of the area, or promote industrial development.  TID incentives encourage private investment and may include land acquisition and/or building rehabilitation/construction.  In return, the developer guarantees an assessed property value and/or the retention or creation of additional jobs over a period of time.

How does it work?
When a Tax Incremental District (TID) is created, the property tax base for all taxing entities (the municipality, schools, county, and technical colleges) is held constant for the life of the TID. Any new increment created by development or redevelopment within the TID is collected by the TID fund and used for eligible improvement projects. The TID is dissolved once the projects within the project plan are complete, there is a positive balance and the bonds for the projects are paid off.  The positive balance and the value of the tax base is then distributed proportionally to the taxing entities.

Tax Incremental Financing Forgivable Loans
The City of Monroe actively uses TIF with the intention of improving the local economy.  Incentives are based on two operating guidelines: (1) for new construction either on a green field site or the expansion of an existing facility with the resulting new tax increment or (2) for the leasing of existing manufacturing or distribution space. Note: TIF incentive proposals are project specific and will include additional considerations involving the number and quality of jobs created, jobs retained, type of business etc. Additionally, all TIF incentive proposals are subject to final approval by the City Council during an open session public meeting. 

TIF "Gap" Financing Program
This program is designed to provide loan funding to help companies have increased access to capital for expansion purposes.  The purpose is to assist in the financing of job-creating expansion projects which cannot be adequately financed using only private sector and equity funding. Without the TIF loan filling the remaining financing gap, the project would not go forward.  

Gap loans are made to for-profit businesses located in specified TIF areas within the CIty of Monroe. For a complete list of eligible businesses, eligible uses of funds and details of the application process, contact us at (608)-329-2500.