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Date Available
6-22-2026
Year of Publication
2026
Document Type
Graduate Capstone Project
Degree Name
Master of Public Financial Management
College
Graduate School
Department/School/Program
Public Administration
Faculty
Iuliia Shybalkina
Committee Member
Rhonda Trautman
Faculty
Margaret Plattner
Abstract
Tax Increment Financing (TIF) is a widely used local government tool for redevelopment and economic growth, yet its expanding application has raised questions regarding its design, governance, and measurable outcomes. This study compares two primary uses of TIF: blight remediation and economic development. While remediation-focused TIF is intended to address identifiable market failures in distressed areas, economic development TIF is typically used to attract or accelerate private investment in more competitive environments.
Using a structured comparative analysis of selected Kentucky TIF districts, this research evaluates how differences in statutory justification, financing mechanisms, governance structures, and performance measures align with each program's underlying purpose. The study relies on document analysis of redevelopment plans, ordinances, development agreements, and financial disclosures, applying an eight-part evaluation framework grounded in public finance and urban policy theory.
Findings indicate that remediation-focused TIF districts more consistently align with theoretical justifications and governance best practices. These districts typically employ reimbursement-based financing, clearly defined “but-for” criteria, and embedded accountability mechanisms that tie public investment to verifiable outcomes. In contrast, economic development-oriented TIF districts rely more heavily on long-term growth projections, introduce greater fiscal risk, and often lack clear performance attribution, requiring stronger governance safeguards and more rigorous evaluation frameworks. Hybrid models demonstrate increased flexibility but also greater complexity and diffuse accountability.
The study concludes that TIF should not be treated as a uniform policy tool. Instead, differentiated standards for design, oversight, and evaluation are necessary based on district purpose. Aligning institutional structure with intended outcomes can improve transparency, reduce fiscal risk, and enhance the credibility of TIF as a public investment strategy.
Recommended Citation
Compton, Leigh, "Comparing Economic Development and Blight Remediation Tax Increment Financing: Design, Governance, and Measurable Outcomes" (2026). MPA/MPP/MPFM Capstone Projects. 474.
https://uknowledge.uky.edu/mpampp_etds/474
