The Impact of Tax Increment Financing on School Finance

Tax Increment Financing (TIF) is designed to revitalize communities, but its effects on school funding are more complex. When rising property tax revenue is diverted to redevelopment instead of school districts, the state must step in with more K–12 funding to fill the gap. This report explains where TIF supports long-term growth versus where it shifts the burden to the state budget — especially as more Colorado districts use the tool. With TIF expansion accelerating, policymakers must evaluate whether gains outweigh the pressure placed on school finance.