TIFA is an acronym for Tax Increment Financing Authority.
It is a method that many Michigan communities use to finance different projects for commercial development, neighborhood revitalization, or other economic development purposes.
Enacted by the Michigan legislature on August 13, 1975, Public Act 197 of 1975, otherwise known as the “DDA Act,” authorized the use of Tax Increment Finance to correct and prevent the deterioration of downtown areas in the State of Michigan. Under P.A. 197, TIF Authorities capture the year-to-year growth in property values, on an annual basis, and reinvest those dollars in “public facilities,” as defined by the statute, within the TIF district.
Tax increment financing allows an established TIFA to "capture" property tax revenue from incremental increases in value in a determined area and spend the "tax increment revenue", or a percentage of the total increased collections, to develop the area or finance a specific project. In other words, the value of any improvements to property located in a designated TIFA district does not go into the overall tax base of the community, but instead is reserved for, or "captured" by, the TIF district.