TIFs can create new funding for schools. Schools continue to receive all the tax revenue they were entitled to before the creation of the TIF district. Also, improving the Town Center will increase the tax base in the long run. The property tax revenue generated from private development attracted by a TIF designation is truly "new" money. Without the TIF, development would not occur and the "tax increment" (increase in property values) would not be produced.
Some critics of TIFs argue that school districts are entitled to immediately receive a percentage of the TIF increment. However, it is the tax increment that pays for the improvement that attract private investment and stimulate growth. If the increment cannot be used for financing improvements and incentives, private investment and economic development will not occur, and no increment will be made available to any taxing bodies. With redevelopment, property values will rise in properties surrounding the TIF area as well, providing added revenue to the school district.
When the TIF district expires, the tax increment is returned to the tax rolls and available to schools and other taxing bodies.