IDEAS home Printed from
   My bibliography  Save this article

The Relationship between Tax Increment Finance and Municipal Land Annexation


  • Mark Skidmore
  • David Merriman
  • Russ Kashian


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.

Suggested Citation

  • Mark Skidmore & David Merriman & Russ Kashian, 2009. "The Relationship between Tax Increment Finance and Municipal Land Annexation," Land Economics, University of Wisconsin Press, vol. 85(4), pages 598-613.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:4:p:598-613

    Download full text from publisher

    File URL:
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Austin, D. Andrew, 1999. "Politics vs Economics: Evidence from Municipal Annexation," Journal of Urban Economics, Elsevier, vol. 45(3), pages 501-532, May.
    2. Anderson, John E., 1990. "Tax Increment Financing: Municipal Adoption and Growth," National Tax Journal, National Tax Association, vol. 43(2), pages 155-63, June.
    3. Brueckner, Jan K., 2001. "Tax increment financing: a theoretical inquiry," Journal of Public Economics, Elsevier, vol. 81(2), pages 321-343, August.
    4. John E. Anderson & Robert W. Wassmer, 2000. "Bidding for Business: The Efficacy of Local Economic Development Incentives in a Metropolitan Area," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number bb, November.
    5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    6. Byrne, Paul F., 2005. "Strategic interaction and the adoption of tax increment financing," Regional Science and Urban Economics, Elsevier, vol. 35(3), pages 279-303, May.
    7. Anderson, John E., 1990. "Tax Increment Financing: Municipal Adoption and Growth," National Tax Journal, National Tax Association, vol. 43(2), pages 155-163, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Skidmore, Mark & Kashian, Russ, 2010. "On the relationship between tax increment finance and property taxation," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 407-414, November.

    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:85:y:2009:i:4:p:598-613. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.