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Tax Increment Debt Finance and the Great Recession

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  • Martin J. Luby
  • Tima Moldogaziev

Abstract

This paper explores U.S. local government debt fnance activities related to Tax Increment Financing (TIF) between 2000 and 2013. We gather comprehensive data about debt that is serviced through TIF, document changes in several variables related to the amount, use, and structural features of such debt, and evaluate the impact of the Great Recession on these variables. Our results indicate that the Great Recession limited how local governments could sell and structure TIF debt. We suggest that these limitations were the result of the limited capital available during and immediately after the fnancial crisis, structural changes in the fnancial industry caused by the fnancial crisis, and increased risk aversion by investors.

Suggested Citation

  • Martin J. Luby & Tima Moldogaziev, 2014. "Tax Increment Debt Finance and the Great Recession," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 675-696, September.
    • Handle: RePEc:ntj:journl:v:67:y:2014:i:3:p:675-696
    DOI: 10.17310/ntj.2014.3.07
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    File URL: https://doi.org/10.17310/ntj.2014.3.07
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    References listed on IDEAS

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    1. Kriz, Kenneth A., 2003. "Comparative costs of negotiated versus competitive bond sales: new evidence from state general obligation bonds," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(2), pages 191-211.
    2. Jayaraman Vijayakumar & Kenneth Daniels, 2006. "The Role and Impact of Financial Advisors in the Market for Municipal Bonds," Journal of Financial Services Research, Springer;Western Finance Association, vol. 30(1), pages 43-68, August.
    3. Craig L. Johnson & Martin J. Luby & Tima T. Moldogaziev, 2014. "State and Local Financial Instruments," Books, Edward Elgar Publishing, number 15845.
    4. George Lefcoe & Charles W. Swenson, 2014. "Redevelopment in California: The Demise of TIF-Funded Redevelopment in California and Its Aftermath," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 719-744, September.
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    Cited by:

    1. Keavy McFadden & Robin Wright, 2023. "Social reproduction and public finance: A comparative study of TIF in California and Chicago," Environment and Planning A, , vol. 55(8), pages 2108-2127, November.

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