Teaching tax increment finance: A policy simulation approach

Abstract

This article presents a policy simulation related to the logistics of establishing a Tax Increment Finance (TIF) District. It has been developed to be flexible in its delivery, and it is designed as a framework in which the complexity can be adjusted to meet the needs and knowledge level of the classroom in which it is being administered. The goals of the simulation are to convey a basic understanding of how tax increment financing can operate in the context of a local government economic development plan and provide the participants a simulated experience that requires planning, forecasting, and negotiation. The simulation stresses the collaborative nature of implementing sound public policy initiatives. Master of Public Administration or upper level undergraduate courses in budgeting, finance, public-private partnerships, or similar public management classes are ideal courses for using the simulation