relationship between tax increment finance and municipal land annexation

We use detailed information from Wisconsin municipalities on annexation and tax increment finance (TIF) activity over the period 1990–2003 to determine whether TIF has encouraged annexation. Declaring a recently annexed area a TIF district increases the fiscal benefit of annexation since it allows t...

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Bibliographic Details
Published in:Land economics 2009-11, Vol.85 (4), p.598-613
Main Authors: Skidmore, Mark, Merriman, David, Kashian, Russ
Format: Article
Language:English
Subjects:
Agricultural land
Annexation
annextion
Coefficients
Economic development
Environment
Finance
Land development
Land economics
Land use
land use change
municipal land
Municipal taxes
Municipalities
Policy making
property tax
Property taxes
Property value
Site planning
States
Studies
Tax increment financing
Taxes
U.S.A
Wisconsin
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Summary:We use detailed information from Wisconsin municipalities on annexation and tax increment finance (TIF) activity over the period 1990–2003 to determine whether TIF has encouraged annexation. Declaring a recently annexed area a TIF district increases the fiscal benefit of annexation since it allows the municipality to direct the incremental revenue increases from overlying governments to economic development activities within the newly formed TIF district. Our analysis suggests that TIF is responsible for as much as 119 square miles, or 54%, of all the land area annexed over the 1990–2003 period in Wisconsin. (JEL O18, R14)
ISSN:0023-7639
1543-8325
DOI:10.3368/le.85.4.598