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Why TIF is Controversial Tax increment financing is a complicated financing tool that is often misunderstood. Misperceptions have created a great deal of controversy; some people believe that TIF creates higher taxes, while others believe that TIF will take money away from other taxing jurisdictions, particularly school districts. Some other misperceptions are that TIF is corporate welfare; that similar development would have occurred without TIF; and that local government should not be involved in economic development. Proponents of TIF dismiss these misperceptions by adhering to the "but for" test and focusing on TIF's positive aspects. Opponents of TIF generally conclude that there are no positive aspects and that the misperceptions are the reality. Original Intent of Tax Increment Financing When legislation was enacted authorizing the use of TIF, the intent was to provide a tool for both financing redevelopment and for leveling the playing field for central cities. After World War II, when buildable land within central cities became non-existent, people and businesses moved out to where land was readily available. These people started building houses and businesses on the fringe of central cities, creating suburbs. The housing stock in the central cities then deteriorated and inner-city retail spaces either became occupied by less socially-acceptable businesses or were left standing unused. The resulting decrease in property values lowered property tax revenues for all taxing jurisdictions in the central cities. At the same time, central cities were experiencing increasing demands for public services such as police and fire departments. Urban counties incurred more social service costs as the population of inner cities became poorer and consumed more services. Tax increment financing thus provided a financing method for inner cities to acquire property and clean up soil conditions remaining from manufacturing businesses that had left the cities. 7