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portion of that money to fund a revolving loan fund, all the while knowing that if worse <br /> comes to worse once the loan is repaid it can be used to cover a deficit. <br /> Tax Increment Financing <br /> If Revolving Loans represent one end of the spectrum of complexity and <br /> investment, then Tax Increment Financing (TIF) is on the other. TIF provides cities and <br /> EDAs with the greatest potential in regards to the amount of financial assistance that can <br /> be provided. This type of financing is used to fund huge public improvement ventures <br /> and is a key tool that cities possess in order to make development happen. <br /> TIF is based on a relatively simple concept, though its actual application is <br /> infinitely more complicated. TIF is based on the notion that a new development will <br /> create a larger tax base then what was previously being provided. Development on a <br /> particular parcel will add value to that property thus creating increased revenue. The <br /> amount of tax revenue being generated before development is designated as the Original <br /> Tax Capacity. The amount of tax revenue being generated after development will <br /> undoubtedly be greater than the original tax capacity; the difference between the pre- <br /> development revenue and the post-development revenue is defined as Increment or <br /> captured tax capacity. <br /> The basic philosophy behind TIF is that cities can capture this increment and use <br /> it as a tool to pay off financial assistance that was provided to create the development. In <br /> laymen's terms because the City will receive increased income from a project it will <br /> provide funding for the project; all the while knowing that it would recoup this <br /> investment in the newly captured increment. What truly makes TIF unique and able to <br /> fund expensive projects is the fact that the City not only captures its share of the <br />