A tax-allocation district (TAD), also known as

tax increment financing Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States. The original intent of a TIF program is ...

, is a defined area where

real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more genera ...

property tax A property tax or millage rate is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or net wealth, taxes on the change of ownership of property through inher ...

monies gathered above a certain threshold for a certain period of time (typically 25 years) to be used for a specified

improvement Improvement is the process of a thing moving from one state to a state considered to be better, usually through some action intended to bring about that better state. The concept of improvement is important to governments and businesses, as well a ...

. The funds raised from a TAD are placed in a tax-free

bond (finance) In finance, a bond is a type of security under which the issuer ( debtor) owes the holder ( creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as wel ...

where the money can continue to grow. These improvements are typically for revitalization and especially to complete

redevelopment Redevelopment is any new construction on a site that has pre-existing uses. It represents a process of land development uses to revitalize the physical, economic and social fabric of urban space. Description Variations on redevelopment include: ...

efforts.

Tax-increment financing Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States. The original intent of a TIF program is ...

has attracted much criticism as merely a

subsidy A subsidy or government incentive is a form of financial aid or support extended to an economic sector (business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from the government, the ter ...

to connected developers. California, where the practice began, has discontinued their use though it will be paying off debt on previous formed districts for years to come. Enactment of a TAD typically requires approval of all

local government Local government is a generic term for the lowest tiers of public administration within a particular sovereign state. This particular usage of the word government refers specifically to a level of administration that is both geographically-loc ...

s who will be giving-up taxes, thus a project within a

municipality A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the ...

will also require approval of the

county A county is a geographic region of a country used for administrative or other purposes Chambers Dictionary, L. Brookes (ed.), 2005, Chambers Harrap Publishers Ltd, Edinburgh in certain modern nations. The term is derived from the Old French ...

's commission (or its local equivalent), and the

board Board or Boards may refer to: Flat surface * Lumber, or other rigid material, milled or sawn flat ** Plank (wood) ** Cutting board ** Sounding board, of a musical instrument * Cardboard (paper product) * Paperboard * Fiberboard ** Hardboard, a ty ...

of the

school district A school district is a special-purpose district that operates local public primary and secondary schools in various nations. North America United States In the U.S, most K–12 public schools function as units of local school districts, w ...

, in addition to the

city council A municipal council is the legislative body of a municipality or local government area. Depending on the location and classification of the municipality it may be known as a city council, town council, town board, community council, rural coun ...

and possibly

township A township is a kind of human settlement or administrative subdivision, with its meaning varying in different countries. Although the term is occasionally associated with an urban area, that tends to be an exception to the rule. In Australia, ...

board of supervisors A board of supervisors is a governmental body that oversees the operation of county government in the U.S. states of Arizona, California, Iowa, Mississippi, Virginia, and Wisconsin, as well as 16 counties in New York. There are equivalent agen ...

(if applicable). This differs from an improvement district, which the property owners agree to pay extra for improvements. That is only an option for an area which is already in good economic health.

Examples

*In the U.S. state of

Georgia Georgia most commonly refers to: * Georgia (country), a country in the Caucasus region of Eurasia * Georgia (U.S. state), a state in the Southeast United States Georgia may also refer to: Places Historical states and entities * Related to the ...

, TAD

legislation Legislation is the process or result of enrolling, enacting, or promulgating laws by a legislature, parliament, or analogous governing body. Before an item of legislation becomes law it may be known as a bill, and may be broadly referred to ...

was created in 1985 and is described in the OCGA sectio
36-44-5

External links

Creating a Tax Allocation District For Athens Clarke County
Urban planning in the United States Local taxation in the United States {{tax-stub