Effects of the Great Recession on Tax Increment Financing in the United States, Georgia and Atlanta

In November 2004, Georgia State University’s Andrew Young School of Policy Studies authored a “Policy Guide to the Evaluation and Use of Tax Allocation Districts” under contract with Research Atlanta, Inc. The use of such districts by Georgia cities and counties and the innovative practice of tax increment financing (TIF) were enabled by the Georgia State Constitution of 1983 and the state’s Redevelopment Powers Act of 1985. The report noted the sudden surge in the popularity of this important economic development tool over the then preceding five years, while pointing out the absence of any systematic assessment of, or set of policies to guide, its use. The study went on to describe how tax allocation districts (TADs) work, the potential benefits and disadvantages of TIF, and what policies local governments should consider in more equitably distributing those benefits and risks among different stakeholder groups. This current report is intended as an update of the 2004 publication in light of experience and policy changes over time, as well as the impact of the Great Recession.