Groves, Jeremy R.
Ph.D. (Doctor of Philosophy)
Department of Economics
Tax Increment Financing (TIF) is a legislatively enacted economic tool that has been widely employed by local governments to promote economic growth. The motivation of this dissertation stems from a critical premise on the designation of TIF districts—the “but for” clause. State legislatures require that TIF initiators must demonstrate the subsidized development in candidate areas would not occur “but for” the subsidy. Such a requirement is inherently counterfactual in nature, which leads to a series of controversies on the fiscal status of overlapping taxing entities and the measurements of local economic development.
This dissertation separately investigates the effects of TIF on school district revenues, arm’s length property value and building permit activities using various empirical techniques, including fixed effects, two-stage probit maximum likelihood, and propensity score with inverse probability weighting models. Estimation results show that school districts with TIF districts experienced a small revenue reduction in Cook County, Illinois from 2009 to 2015; properties located within TIF districts were sold for more than parcels outside of TIF districts by approximately five thousand dollars in Indiana from 2009 to 2016; and TIF tracts in Cook County experienced an average of four percentage points decrease in building permit activities from 2009 to 2017.
He, Chaoran, "Effects of Tax Increment Financing on School Finance and Local Economic Development" (2019). Graduate Research Theses & Dissertations. 7110.
Northern Illinois University
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