Tax Increment Financing (TIF) is a municipal financial scheme whereby DC taxpayers fund and support private development projects throughout the city.
TIFs allow the diversion of taxes that would otherwise be generated by these new projects away from the city’s general budget for social needs (schools, parks, affordability, services, etc.), and instead these taxes are used to pay back private bankers whom authorized the TIF credit and municipal loan.
TIFs act as blank checks from the public to fund and externalize private development costs and is considered a form of corporate welfare.
- Here’s the city’s webpage showing data list of TIF districts in DC.
- Here’s the law governing TIFs as found in the DC Code.
- Here’s the city’s Office of Chief Financial Officer 2016 TIF Analysis
* note: all monies noted here are based on annual repayment amounts, not the total TIF amounts
Governments often use TIF resources to prepare land for development or redevelopment. In addition, governments may use TIF revenues to underwrite certain public structures, such as parking garages. If permissible under state statute, the construction of municipal facilities can be financed using TIF revenues. An Elected Official’s Guide to TAX INCREMENT FINANCING by Nicholas Greifer & The Government Finance Officers Association, July 2007.
The most recent District of Columbia TIF is for Union Market developers.
- The TIF will tax existing and new residents living and working in the Union Market area in Wards 5 & 6 to pay for the $85 million dollar TIF. D.C. Council to consider one of city’s largest TIFs ever to support Union Market area
- The City Council is poised to support the Union Market TIF while simultaneously making it harder to access emergency shelter in DC.
WARD 5 TIF
- Here’s the legislative docket for the 2015 Edgewood Developer TIF. D.C. steps in to subsidize MRP’s big dig in Edgewood
THE SOUTHWEST WATERFRONT aka WHARF TIF
- Lobbyist Firm, Carmen Group, Touts the $145+ million WHARF gift
- Here’s Moody’s take on the gift from District taxpayers to Monty Hoffman’s Wharf project.
The Living Social TIF Gift
- It started in 2012 . . . D.C. Council approves LivingSocial tax breaks
- Then there was an update in 2013 showing broken promises . . . LivingSocial has yet to reach hiring and other goals to claim D.C. tax breaks
- Then in 2017, RIP LivingSocial: The fast rise and slow demise of a daily deals company
TIFs as political hot potatoes, a DC neighborhood-level discussion in Bloomingdale in 2010.
Many of the District’s special deals have been very costly. In 2002, Gallery Place, a mixed-use transit-oriented development, received about $80 million in subsidies. To sell the TIF bonds for just this one project, DC had to pledge that incremental sales tax revenue from a much larger area would be made available if necessary. In 2006, another development in a quickly gentrifying neighborhood, the DC-USA mall project anchored by a Target store, received a $42 million TIF package. The District justified the deal in part by claiming it would enhance sales tax revenue in the surrounding neighborhood (DC has a problem with sales tax “leakage” to Maryland and Virginia), but DC has no method of tracking sales tax by location to determine if that worked. Good Jobs First, “Tracking Subsidies, Promoting Accountability in Economic Development,” Accountable USA – District of Columbia webpage.
Tax Increment Financing: A comparison between Washington, D.C. and Chicago, by Jasson Perez, University of Illinois Chicago, 2015.