When Mississippi’s SB 2846 takes effect on July 1, 2026, it will reshape how municipalities structure Tax Increment Financing. For municipal financial advisors — the professionals responsible for evaluating every bond issuance, every incentive structure, and every long-term obligation — this legislation introduces a structuring mechanism that changes the risk calculus entirely: developer-backed TIF Bonds.
This isn’t a new tax. It isn’t a new liability. It’s a new way to structure an existing tool that moves financial risk away from the municipality and onto the party best positioned to manage it — the developer.
Here’s what you need to know, and how to start evaluating these structures for the communities you advise.
How TIF Works — A Quick Refresher for the Advisory Context
TIF captures the incremental increase in property tax revenue generated by a new development project. Before a project breaks ground, the property in the designated area produces a baseline of tax revenue — the original assessed value. After the project is completed and the property is reassessed at a higher value, the difference between the new tax revenue and the original baseline is the “increment.” That increment is directed into a dedicated fund and used to repay the costs associated with making the project possible.
Critically, the original assessed value continues to flow to all taxing jurisdictions exactly as it did before. Nothing is redirected from existing revenue streams. Only the new, incremental revenue is captured — and only for a limited duration, up to 30 years under Mississippi law. When the TIF period expires, the full assessed value, including what had been the increment, returns to general distribution.
For advisors modeling long-term budget impacts, this distinction matters: TIF does not reduce existing revenue. It temporarily allocates new revenue that would not exist without the project itself.
What Changes Under SB 2846: The Taxpayer Agreement
The most significant addition SB 2846 brings to Mississippi’s TIF framework is the authorization of voluntary taxpayer agreements between a municipality and the property owner or developer. These agreements are the legal foundation for developer-backed TIF Bonds, and they carry several structural features that should matter to any advisor conducting a risk assessment.
First, a taxpayer agreement is a voluntary, binding contractual obligation of the developer — not the municipality. It is explicitly defined in the statute as not constituting a tax, fee, or assessment imposed by the municipality. It does not pledge the faith, credit, or taxing power of the state or any municipality. And it does not constitute indebtedness for purposes of any constitutional or statutory debt limitation.
Second, taxpayer agreements may be secured by a lien on the real property within the project area. That lien arises automatically upon execution and recordation, carries parity with ad valorem tax liens, and takes priority over any subsequent mortgage, judgment, or other encumbrance. It can be enforced and foreclosed in the same manner as delinquent ad valorem taxes. For advisors evaluating security structures, this lien provision offers a level of enforceability comparable to the tax collection apparatus itself.
Third, the municipality may issue bonds as a conduit issuer, with those obligations secured by payments under one or more taxpayer agreements, any associated liens, tax increment revenues, or any combination of the above. The statute is explicit: the municipality issuing conduit bonds has no obligation to advance funds, levy taxes beyond the ordinary course, or appropriate money for payment. These bonds are payable solely from the pledged security and do not constitute a general obligation of the municipality.
Why This Structure Matters for Your Analysis
As a municipal financial advisor, you’re evaluating every proposed incentive against a set of fundamental questions: Does this create a liability? Does it affect our credit rating? Does it interact with existing debt covenants? Does it expose overlapping taxing jurisdictions to risk? Developer-backed TIF Bonds structured under SB 2846 are designed to answer each of those questions favorably. Because the obligation sits with the developer through the taxpayer agreement — and because the statute explicitly excludes these instruments from municipal debt limitations — the municipality’s balance sheet and credit profile remain insulated. The developer, not the municipality, bears the performance risk. If the increment falls short of required debt service, the taxpayer agreement obligates the developer to cover the shortfall.
This is a fundamentally different risk profile than a traditional municipal-backed TIF bond, where the municipality’s credit and taxing power stand behind the obligation. Under this structure, the municipality acts as a conduit, facilitating the financing mechanism without assuming the financial exposure.
How Hageman Capital Fits Into the Structure
In a developer-backed TIF Bond transaction, the municipality issues the TIF Bond to the developer. The developer then assigns — sells — that bond to a capital provider. Hageman Capital is the firm that purchases those bonds, providing the developer with immediate upfront capital to begin construction rather than waiting years for incremental tax payments to accumulate.
For municipal advisors, Hageman Capital functions as a resource at the structuring stage. The firm brings deep experience in TIF bond structures across multiple state legislative frameworks and can work alongside your team to ensure the taxpayer agreement, bond documentation, and redevelopment agreement are structured in a way that protects the municipality’s interests while giving the developer the liquidity needed to move forward.
Hageman Capital does not charge municipalities for this expertise. The firm’s role is to ensure the bonds are structured soundly so they can be purchased from the developer — which means your interests and theirs are aligned: a well-structured deal that performs as projected.
What to Do Next
If you’re advising a Mississippi municipality that is evaluating a development proposal — particularly multifamily, mixed-use, or commercial projects — developer-backed TIF Bonds should be part of your incentive analysis. The combination of SB 2846’s taxpayer agreement provisions, the explicit exclusion from municipal debt, and the availability of a capital partner willing to purchase these bonds creates a structure that can attract and retain developers without putting your municipality’s credit on the line.
Hageman Capital is available to walk through deal structures, provide modeling support, and answer questions about how developer-backed TIF Bonds have been deployed in comparable markets. Reach out to start the conversation.
If you serve on a city council in Mississippi, there is a good chance someone — a mayor, an economic development director, or a commercial real estate developer — is going to put a TIF proposal on your desk soon. When that happens, your job is straightforward but high-stakes: understand what you are voting on, decide whether it benefits your community, and be prepared to explain that vote to the people who elected you.
Mississippi’s updated TIF legislation, Senate Bill 2846, gives your municipality a new and more favorable way to structure TIF incentives. The key change is that TIF Bonds can now be backed by the developer rather than by the municipality. That single structural shift changes the risk equation for your city — and it is worth understanding before you cast your vote.
A Quick Refresher: How TIF Works
Tax Increment Financing does not create a new tax or raise anyone’s tax rate. It captures the increase in property tax revenue that a new development generates — the “increment” — and uses that increase to help pay for costs associated with making the project happen. Before a development project breaks ground, the land in the project area produces a certain amount of property tax revenue each year. That amount is called the original assessed value, and it continues flowing to the city, county, school district, and other taxing bodies as usual.
Nothing about those existing revenues changes. After the project is built, the property is worth more, so property taxes go up. The difference between the new, higher amount and the original assessed value is the increment. Under TIF, that increment is set aside and used to repay the eligible costs of the development over a defined period of up to 30 years. When the TIF period ends, all tax revenue — including what had been the increment — flows back to every taxing jurisdiction at the full, higher amount.
In short, TIF lets your city use the future tax growth a project creates to help make that project possible in the first place, without touching your existing tax base.
What Changes with Developer-Backed TIF Bonds
Historically, many TIF structures have relied on municipal credit to back the bonds issued for a project. That means the municipality assumes some degree of financial exposure if the project underperforms. For council members, that creates a legitimate concern: what happens if the development does not generate enough increment to cover the bond payments?
Under SB 2846, Mississippi municipalities can now structure TIF Bonds as developer-backed obligations. Here is what that means in practice: The municipality issues a TIF Bond to the developer. The developer then assigns — essentially sells — that bond to a capital provider like Hageman Capital, receiving upfront cash to fund the project’s development costs. The bond is repaid over time solely from the incremental property taxes the completed project generates. Critically, the bond does not constitute a general obligation or debt of the municipality. Your city’s general credit and taxing power are not pledged. The municipality is not on the hook if the increment falls short.
SB 2846 also authorizes voluntary “taxpayer agreements” between the municipality and the developer. These agreements create a contractual obligation for the developer to make up any shortfall in increment revenue. The legislation is explicit: these agreements do not constitute a tax, a fee, or municipal indebtedness, and they do not count against any constitutional or statutory debt limits. A taxpayer agreement can even be secured by a lien on the developer’s real property, giving the arrangement additional enforceability.
This is a fundamental shift. The financial risk moves from taxpayers and the municipality to the developer and the project itself.
Why This Matters for Your Vote
As a council member, every vote on a major development project carries weight. Constituents may question whether you are approving a handout to a private developer. They may worry about the impact on schools or other taxing bodies. Developer-backed TIF Bonds address those concerns directly.
First, existing tax revenues are not affected. The original assessed value continues to flow to every taxing jurisdiction, including school districts, throughout the life of the TIF. Only the new, incremental revenue generated by the development is captured — revenue that would not exist without the project.
Second, the municipality carries no debt obligation. Because developer-backed TIF Bonds are not general obligations, they do not appear on your city’s balance sheet, do not affect your bond rating, and do not count against any debt limits.
Third, the developer bears the performance risk. If the project does not generate sufficient increment, the taxpayer agreement requires the developer — not the city — to cover the gap. Your constituents are protected.
What Council Members Should Ask
When a TIF proposal comes before you, there are a few questions worth raising to ensure the deal is structured well. Does the project genuinely need TIF to be viable? What is the projected increment, and does it cover the bond payments with a reasonable cushion? Has the redevelopment plan been reviewed by qualified financial and legal advisors? Does the taxpayer agreement include sufficient protections for the municipality? And what public benefits — jobs, infrastructure, expanded tax base — will the completed project deliver to your community? These are not questions designed to slow a deal down. They are questions that make you a better steward of public resources and give you the language to explain your vote with confidence.
A Resource, Not a Sales Pitch
Hageman Capital works with municipalities across the country to help local leaders understand how developer-backed TIF Bonds work and how to structure them in a way that protects the public interest. We are not asking you to approve anything. We are offering the legal, financial, and real estate expertise to make sure that when a TIF proposal does land on your desk, you have the clarity to evaluate it on its merits. If you would like to learn more about how TIF Bond structuring works in Mississippi under SB 2846, Hageman Capital is here as a resource. Reach out to start the conversation.
Mississippi’s TIF landscape is changing. With Senate Bill 2846 set to take effect July 1, 2026, economic development directors across the state now have access to a more flexible, lower-risk approach to structuring Tax Increment Financing. The legislation introduces voluntary taxpayer agreements and formalizes a financing mechanism that shifts the financial burden of TIF bonds away from municipalities and onto the developers who stand to benefit most from the completed project.
For economic development professionals tasked with attracting investment, retaining developers, and growing the local tax base, this is a practical upgrade to one of the most powerful incentive tools available. Here’s what it means for how you structure your next deal.
A Quick Refresher: How TIF Works in Mississippi
TIF is not a new tax. It captures the increase in property tax revenue — the “increment” — generated by a new development project and directs that increase toward repaying the costs associated with making the project possible.
Before a project breaks ground, the land in the designated project area generates a baseline level of property tax revenue, known as the original assessed value. After the project is built, the property’s value rises and so do the taxes. The difference between the new, higher amount and the original baseline is the captured assessed value, or the increment. Under TIF, that increment flows into a dedicated fund used to repay eligible project costs over the life of the bond — up to 30 years.
The original assessed value continues flowing to the city, county, school district, and other taxing bodies as usual. Nothing is diverted from existing revenue. Only the new growth is captured, and only temporarily.
Mississippi also allows municipalities to pledge a percentage of sales tax collected within the TIF district and attributable to a project, adding another layer of flexibility for structuring deals.
What Changes with Developer-Backed TIF Bonds
Traditionally, TIF bonds have carried at least an implied connection to municipal credit, raising concerns about risk exposure and debt capacity. Developer-backed TIF bonds work differently.
Under this structure, the municipality issues a TIF bond directly to the developer. The developer then assigns — or sells — that bond to a capital provider, receiving upfront funds to put toward eligible development costs. The bond is repaid solely from the increment generated by that specific project. It does not constitute a general obligation of the municipality. It does not count against statutory or constitutional debt limits. And it does not pledge the municipality’s general credit or taxing power.
In plain terms: the municipality facilitates the bond but does not guarantee it. The financial risk sits with the developer and the capital provider, not with your city’s balance sheet.
Taxpayer Agreements: The New Safeguard
SB 2846 introduces a key mechanism that strengthens the developer-backed model — the voluntary taxpayer agreement. This agreement, entered into between the municipality and the property owner or developer, creates a binding contractual obligation tied to the ad valorem taxes on the project area.
What makes this significant for economic development directors structuring a deal:
The taxpayer agreement can guarantee, enhance, or otherwise secure the repayment of bonds issued to finance the redevelopment project. If the increment falls short of required debt service payments, the developer is contractually obligated to make up the difference. The agreement can also be secured by a lien on the real property, recorded with the chancery clerk, and that lien carries parity with ad valorem tax liens — giving it strong legal standing.
Critically, the legislation specifies that these agreements do not constitute a tax, fee, or assessment imposed by the municipality. They are not public debt. They do not pledge governmental credit. This is a voluntary, private-sector obligation layered on top of the TIF structure to protect the public interest.
Why This Matters for Your Next Deal
As an economic development director, you live in the space between what a developer needs to make a project pencil and what your municipality can responsibly offer. Developer-backed TIF bonds, structured with taxpayer agreements, give you a tool that serves both sides. Developers get a clear path to upfront capital. When a developer holds a TIF bond backed by a taxpayer agreement and secured by a property lien, that bond becomes an asset a capital provider can purchase. The developer receives cash at or near closing — capital that goes directly toward construction and project delivery. That speed can be the difference between winning and losing a deal against a competing city.
Municipalities get growth without exposure. Because the bond is not a general obligation and the taxpayer agreement is not public debt, you can facilitate meaningful incentive packages without putting your city’s credit rating, debt capacity, or general fund at risk. The increment only exists because the development exists. If the project performs, the bond gets repaid. If the increment falls short, the developer — not the taxpayer — covers the gap.
For economic development directors managing a pipeline across multiple projects, this structure is repeatable. Each TIF bond is project-specific and developer-backed, meaning you can deploy the tool across your portfolio without stacking municipal obligations.
Structuring for Success: Practical Considerations
Getting the structure right matters. A few considerations as you evaluate developer-backed TIF bonds for your pipeline: Start with a solid financial analysis. Engage consultants experienced in TIF to model the projected increment, confirm eligible costs, and ensure the coverage ratio — the margin between projected increment and debt service — provides a reasonable cushion.
Coordinate early with the county. If your TIF plan will capture county ad valorem increment, you’ll need the board of supervisors on board. An interlocal cooperation agreement between the city and county allows both to pledge their respective revenues toward servicing the TIF debt. Negotiate the redevelopment agreement and taxpayer agreement in tandem. These two documents are the backbone of the transaction. The redevelopment agreement governs the developer’s obligations — timeline, eligible costs, reporting requirements, remedies for default. The taxpayer agreement layers on the financial backstop. Structuring them together ensures alignment and reduces the risk of gaps.
Prepare elected officials with clear, plain-language materials. Your mayor and council will vote on the redevelopment plan. They’ll face constituent questions. Equipping them with straightforward explanations of how developer-backed bonds protect the municipality — and how the taxpayer agreement ensures accountability — makes the approval process smoother for everyone.
A Resource, Not a Sales Pitch
Hageman Capital works with municipalities across the country as a resource for understanding and structuring developer-backed TIF bonds. We sit at the intersection of municipal finance and commercial real estate, and our role is to help economic development professionals like you navigate TIF structures with confidence — from the initial conversation with a developer through bond issuance and beyond.
If you’re exploring how TIF can work for your community, or if you have a project in your pipeline that could benefit from this structure, we’re here to help you think it through. No obligation, no cost — just expertise in a space where getting the structure right makes all the difference.
Mississippi mayors have long understood that attracting quality development is one of the most important things they can do for their communities. More development means more jobs, a stronger tax base, and a higher quality of life for residents. But incentivizing that development — particularly large-scale commercial real estate projects — has always come with a difficult question: how much public risk is too much?
New TIF legislation in Mississippi is changing the answer. Senate Bill 2846, signed into law and effective July 1, 2026, introduces a financing mechanism that allows municipalities to support major development projects through developer-backed TIF bonds — a structure that shifts capital risk away from the city and onto the developer, where it belongs.
For mayors looking to grow their communities without putting municipal credit on the line, this is a tool worth understanding.
What Is TIF, and Why Does It Matter?
Tax Increment Financing is not a new tax. It does not raise anyone’s tax rate. Instead, TIF captures the increase in property tax revenue — the “increment” — that a new development project generates, and directs that increase toward paying for costs associated with that project. Here is how it works in simple terms. Before a project is built, a piece of land generates a certain amount of property tax revenue each year. That is the original assessed value. After a development is completed, the land and improvements are worth more, so property taxes go up. The difference between the new, higher amount and the original assessed value is the increment. Under TIF, that increment is set aside and used to repay the costs that made the project possible.
The original tax revenue continues flowing to the city, county, schools, and other taxing jurisdictions as usual. Nothing changes about those funds. Only the increment is redirected, and only for a limited period — up to 30 years under Mississippi law. When the TIF period ends, all revenue, including what was the increment, flows back to every taxing body at full value.
Developer-Backed TIF Bonds: The Key Difference
This is where Mississippi’s new legislation creates a meaningful shift for mayors.
In a traditional TIF structure, the municipality may issue bonds backed by its own credit to finance a project. That means the city carries the financial risk if the project underperforms. Developer-backed TIF bonds work differently. Under this structure, the municipality issues a TIF bond directly to the developer. The developer then assigns that bond to a capital provider — like Hageman Capital — in exchange for upfront cash to fund construction. The bond is repaid over time solely from the incremental property taxes generated by the completed project.
The critical distinction: the bond does not constitute a general obligation of the municipality. It does not count against any constitutional or statutory debt limits. The city’s general credit and taxing power are never pledged. If the increment falls short, the developer — not the city — is responsible for covering the gap.
SB 2846 strengthens this protection further by authorizing voluntary taxpayer agreements between the municipality and the developer. These agreements create a binding contractual obligation for the developer to make up any shortfall in increment revenue. They can even be secured by a lien on the project property itself, recorded at the county level, with priority comparable to ad valorem tax liens. This gives municipalities an additional layer of assurance that the project will perform as promised.
What This Means for Your Community
As a mayor, every major development decision carries your name. Constituents want to know that public resources are being used wisely, and council members want to be confident that the city is not taking on unnecessary exposure. Developer-backed TIF bonds address both of those concerns directly.
Because the developer holds the financial risk, you can support transformative projects — multifamily housing, mixed-use developments, commercial centers — without putting your city’s balance sheet on the line. The municipality acts as a conduit issuer, facilitating the bond but never guaranteeing it. The project pays for itself through the new tax revenue it creates.
This structure also gives you a powerful recruiting tool. Developers evaluating where to build their next project are looking for municipalities that understand modern incentive tools and can move efficiently. Offering a clear, well-structured TIF bond pathway signals that your city is development-ready and business-friendly — without the perception that you are giving away public dollars.
How the Process Works
The path from initial conversation to project completion follows a clear sequence. A developer approaches the municipality with a proposed project and makes the case for TIF assistance. The city evaluates the proposal, prepares a redevelopment plan and TIF plan, holds a required public hearing, and then the governing body votes to approve the plan. From there, the municipality and the developer negotiate a redevelopment agreement that spells out construction timelines, eligible costs, developer guarantees, and the taxpayer agreement provisions authorized under SB 2846. Once the agreement is executed, the municipality issues the TIF bond to the developer, who then assigns it to a capital provider for upfront funding.
Throughout the process, transparency is built in. Public hearings give residents and affected property owners a voice. The redevelopment plan is documented and adopted by resolution. And the taxpayer agreement ensures the developer has contractual skin in the game.
A Resource, Not a Sales Pitch
Navigating TIF for the first time — or adapting to new legislation — does not have to fall entirely on your shoulders. Hageman Capital works with municipal leaders across the country as a resource for understanding how developer-backed TIF bonds are structured, how they protect municipal interests, and how they can be deployed to attract the kind of development your community needs. There is no cost to the municipality for this expertise. The goal is straightforward: help mayors and their teams make informed decisions about a tool that can drive meaningful growth.
If your city is fielding development inquiries, or if you are looking for ways to compete for quality projects without assuming financial risk, understanding developer-backed TIF bonds is a strong place to start.
Mississippi’s Tax Increment Financing framework — strengthened by the passage of Senate Bill 2846 — gives municipalities a powerful new tool for attracting commercial real estate development without exposing public credit. But for municipal financial advisors, the opportunity comes with a caveat: developer-backed TIF Bonds only protect your municipality if the structure is built correctly from the start. A misstep in increment modeling, Taxpayer Agreement negotiation, or statutory compliance can turn a promising project into a fiscal liability. Here are the pitfalls Hageman Capital sees most often — and how to avoid them.
Pitfall #1: Overestimating Increment Revenue
The most consequential mistake in any TIF transaction is projecting more increment revenue than the project will actually generate. Increment is driven by the increase in assessed value once a project is complete — the difference between the original assessed value and the new, higher valuation. If those projections are built on optimistic absorption timelines, inflated rental rates, or aggressive cap rate assumptions, the math falls apart once the development is on the ground.
Mississippi’s TIF Act allows increment capture for up to 30 years, but a longer timeline doesn’t fix a bad projection. Financial advisors should insist on conservative underwriting: realistic market rents, defensible absorption schedules, and adequate coverage ratios between projected increment and annual debt service. The Hageman Capital team models TIF Bonds across markets every day, and we regularly see projections that assume best-case outcomes rather than base-case reality. A sound TIF Bond structure starts with numbers you’d stake your professional reputation on — because effectively, you are.
Pitfall #2: Underutilizing Taxpayer Agreements
Senate Bill 2846 introduced voluntary Taxpayer Agreements into Mississippi’s TIF framework — and they are arguably the single most important protection available to municipalities in a developer-backed bond structure. A Taxpayer Agreement creates a binding contractual obligation requiring the developer to guarantee minimum payments if increment falls short of debt service requirements. It can also be secured by a lien on the project’s real property, with parity to ad valorem tax liens.
The pitfall isn’t that advisors are unaware of Taxpayer Agreements — it’s that they treat them as optional or negotiate them with insufficient rigor. A Taxpayer Agreement should be detailed, enforceable, and structured alongside the redevelopment agreement rather than as an afterthought. Key provisions to negotiate include specific shortfall payment triggers, lien terms, default remedies, and a clear assignment clause that allows the municipality to transfer enforcement rights to a bondholder or trustee. Hageman Capital has deep experience structuring these agreements across multiple states and can help your team ensure nothing is left on the table.
Pitfall #3: Misunderstanding What Developer-Backed Means
Developer-backed TIF Bonds are not general obligations of the municipality. They carry no pledge of municipal credit or taxing power and do not count against statutory debt limits. This is the core advantage of the structure SB 2846 enables — but some financial advisors apply the same analytical framework they would use for a municipal-backed bond, or conversely, treat the “developer-backed” label as an invitation to relax due diligence.
Neither approach is correct. The right framework recognizes that your municipality is acting as a conduit issuer. The bond is repaid solely from increment revenue and developer guarantees. That means the financial advisor’s job shifts from evaluating municipal capacity to evaluating developer capacity: Does this developer have the balance sheet to support the Taxpayer Agreement? Is the project’s pro forma realistic? What happens if construction is delayed or costs escalate? These are the questions that protect the public interest, and they require a different analytical lens than traditional municipal debt.
Pitfall #4: Failing to Coordinate With Overlapping Taxing Bodies
TIF captures the incremental increase in property tax revenue — revenue that would otherwise flow to every taxing jurisdiction that levies property taxes in the project area. That includes school districts, counties, and utility districts. Financial advisors who fail to coordinate early with these overlapping taxing bodies risk political opposition, legal challenges, or interlocal disputes that can derail a project after months of work.
Mississippi’s framework allows municipalities and counties to enter into interlocal cooperation agreements pledging both municipal and county increment to service TIF debt. This is a powerful feature, but it requires proactive negotiation and clear communication about how existing revenue streams are protected. The original assessed value continues to flow to all taxing jurisdictions as usual — only the increment is redirected, and only for the bond’s term. Making that case clearly and early to school boards and county supervisors is essential. Hageman Capital regularly supports these conversations by providing independent analysis that overlapping jurisdictions can trust.
Pitfall #5: Neglecting the Public Hearing and Statutory Process
Mississippi’s TIF Act requires specific procedural steps before a TIF Bond can be issued: a redevelopment plan, a TIF plan, a public hearing with proper notice, governing body approval, and certification of the original assessed value by the municipal clerk. Skipping a step or cutting corners on public notice creates vulnerability to legal challenge — and in a state where this legislation is newly enacted and untested in court, procedural compliance isn’t just good practice, it’s essential protection.
Financial advisors should ensure every statutory requirement is met with documentation to prove it. The public hearing in particular is both a legal requirement and a political opportunity — it’s where elected officials demonstrate transparency and where community concerns can be addressed directly. Hageman Capital’s team is well versed in the full procedural sequence outlined in Mississippi’s TIF Act and can help your municipality build a process that withstands scrutiny.
Hageman Capital: Your Free TIF Bond Resource
Every pitfall on this list is avoidable — with the right expertise in the room. Hageman Capital works alongside municipal financial advisors as a free resource, helping you navigate the full TIF Bond process from initial developer inquiry through Taxpayer Agreement structuring and bond issuance. We understand Mississippi’s new statutory framework inside and out, and our team speaks bond, budget, and balance sheet. Whether you need help pressure-testing increment projections, structuring a Taxpayer Agreement, or simply understanding how SB 2846 applies to a specific deal, our Director of Government Relations, Whitney Peterson, is available for a no-cost consultation. [Request a meeting with Whitney here.] There’s no obligation — just experienced TIF Bond professionals ready to help you protect your municipality and get the structure right.
As a City Council Member in Mississippi, you’ll soon face a vote that carries real weight — approving a developer-backed TIF Bond under the state’s new legislation, Senate Bill 2846. TIF is a powerful tool for community growth, but only when the details are right. The good news is you don’t need a finance degree to cast an informed vote. You need the right questions, the right framework, and the right resource in your corner. That’s where Hageman Capital comes in. We work with municipal leaders across the country as a free expert resource on TIF Bond structuring — helping bridge the gap between what developers need and what your community deserves. Here are the most common pitfalls we see council members walk into, and how to avoid every one of them.
Pitfall #1 — Confusing Developer-Backed TIF Bonds With Municipal Debt
The single most common misconception we encounter is council members assuming that approving a TIF Bond means their city is taking on debt. Under SB 2846, that’s simply not the case. Developer-backed TIF Bonds are repaid solely from the incremental property tax revenue generated by the specific development project — not from the city’s general fund, and not from existing tax revenue. The developer, not the municipality, carries the financial obligation. The law is explicit: these bonds do not constitute public debt, do not count against statutory or constitutional debt limits, and do not pledge your city’s credit or taxing power. If a constituent asks whether you just voted to put the city on the hook for a private project, the answer is a clear and defensible no. Hageman Capital helps council members understand this distinction inside and out, so you can explain it confidently at any public meeting or town hall.
Pitfall #2 — Voting Without Understanding What Happens if the Project Underperforms
One of the most important questions a council member can ask is: what happens if the development doesn’t generate enough tax increment to cover the bond payments? Under Mississippi’s previous TIF framework, that question was harder to answer. SB 2846 changes the equation by authorizing voluntary taxpayer agreements — contractual obligations that require the developer to make up the shortfall if the increment falls short. These agreements can also be secured by a lien on the developer’s real property, with the same enforcement priority as ad valorem tax liens. In plain terms, the developer has skin in the game at every stage. Hageman Capital can walk your team through exactly how these taxpayer agreements are structured and what protections they provide, so you’re never voting on a deal without knowing who bears the risk.
Pitfall #3 — Assuming TIF Diverts Revenue From Schools and Other Taxing Bodies
This concern comes up in nearly every council chamber, and it’s understandable. Constituents want to know: is this TIF going to take money away from our schools? The answer, when a TIF Bond is structured correctly, is no. TIF captures only the increment — the new tax revenue that would not exist without the development project. The original assessed value, and every dollar of tax revenue it generates, continues flowing to every taxing jurisdiction exactly as it does today. Schools, the county, utilities — none of them lose a single dollar of their current funding. They gain a dollar of new funding once the TIF period ends and the full assessed value flows back to all jurisdictions. Hageman Capital provides council members with clear, jargon-free explanations of how the increment works, giving you ready-made talking points to address constituent concerns head-on.
Pitfall #4 — Not Asking the Right Questions During the Public Hearing
Mississippi law requires a public hearing before any TIF plan is approved. This is your opportunity — and your responsibility — to ask questions on the record. But too many council members stay quiet because they’re unsure what to ask. Here’s what Hageman Capital recommends every council member focus on: Does this project genuinely need TIF to be viable? What are the projected increment revenues, and are they based on conservative assumptions? What safeguards exist if the project timeline slips? Is the dedication requirement being waived, and if so, has the governing body made the required best-interest finding? What is the maximum term and total cost to the increment fund? These aren’t gotcha questions — they’re the questions that demonstrate diligence, build public trust, and ensure you’re casting an informed vote. We help council members prepare for these moments so there are no surprises.
Pitfall #5 — Going It Alone When Expert Help Is Free
Perhaps the biggest pitfall of all is thinking you have to navigate TIF on your own. TIF Bond structuring sits at the intersection of municipal law, real estate development, and public finance — three areas that rarely overlap in a council member’s day-to-day responsibilities. Hageman Capital exists specifically to fill that gap. We serve as a free resource to Mississippi municipalities, providing education on how developer-backed TIF Bonds work under SB 2846, helping evaluate whether a proposed project is well-structured, and ensuring that both the municipality’s interests and the developer’s needs are met. We bring the legal and real estate expertise so you can focus on what you were elected to do: represent your district and make the best decision for your community.
Start the Conversation — Request a Meeting With Our Team
If you’re a Mississippi City Council Member preparing for a TIF vote — or simply want to understand how developer-backed TIF Bonds work before one hits your agenda — Hageman Capital is here to help. Whitney Peterson, our Director of Government Relations, works directly with municipal leaders to answer questions, provide educational materials, and walk through the specifics of your community’s situation. There’s no cost and no obligation. Fill out the form below to request a meeting with Whitney and take the first step toward voting with confidence.
Mississippi’s new TIF legislation — anchored by SB 2846, effective July 1, 2026 — gives Economic Development Directors a powerful tool to attract commercial real estate investment and grow their community’s tax base. Developer-backed TIF Bonds shift risk off the municipality, provide developers with upfront capital, and create a clear path from a project proposal to a groundbreaking. But like any complex financial mechanism, the details matter. Structure a deal wrong, and you risk stalled projects, political fallout, or missed opportunities. Here are the most common pitfalls we see Economic Development Directors encounter with TIF — and how to avoid them.
Pitfall #1: Treating TIF Like a Generic Incentive
TIF is not an abatement. It’s not a grant. And it doesn’t work the same way as MMEIA or a fee-in-lieu agreement. One of the most frequent mistakes is lumping TIF Bonds into the same mental category as other incentive tools, then trying to apply the same evaluation framework. The difference is structural: a developer-backed TIF Bond is repaid solely from the incremental property tax revenue generated by the completed project. The municipality’s general credit is never pledged. The bond doesn’t count against constitutional or statutory debt limits. And under SB 2846, the developer can now enter into a voluntary taxpayer agreement that contractually obligates them to cover any shortfall in increment. That’s a fundamentally different risk profile than a municipal-backed bond or a direct tax exemption. Economic Development Directors who understand this distinction can present TIF to their mayor and council with far greater confidence — and far fewer questions they can’t answer.
Pitfall #2: Skipping the “But-For” Analysis
Every TIF project should be able to pass a basic feasibility test: but for the availability of TIF, would this project be economically viable in this location? This isn’t just a best practice — it’s the foundation of your credibility when presenting a deal to elected officials and the public. If a developer approaches you requesting TIF assistance for a project that pencils fine without it, you’ve got a problem. Not because TIF can’t still be used, but because the public conversation around that project will be harder to win. Before you commit staff time and political capital to structuring a TIF Bond, make sure you’ve evaluated whether the project genuinely needs the incentive to close the equity gap. If the answer is yes, the “but-for” test becomes your strongest talking point. If the answer is murky, it’s worth a harder conversation with the developer before moving forward.
Pitfall #3: Underestimating the Importance of Increment Projections
The entire financial viability of a developer-backed TIF Bond depends on one number: the projected tax increment. That’s the difference between the property’s original assessed value and its reassessed value once the project is complete. If the increment projection is too aggressive — built on optimistic assessed values, unrealistic construction timelines, or assumptions about market appreciation that may not materialize — the bond’s repayment schedule won’t hold up. Mississippi’s TIF Act allows terms of up to 30 years, but the projection needs to be conservative enough to withstand market fluctuations within that window. This is where independent financial analysis is critical. Work with a qualified financial consultant who has specific TIF modeling experience. Have them stress-test the increment under multiple scenarios. And remember: the taxpayer agreement provision in SB 2846 provides a backstop if increment falls short, but it shouldn’t be treated as a substitute for sound projections up front.
When a TIF Bond captures incremental property tax revenue, that increment is redirected from its normal distribution to the TIF fund. That means other taxing bodies — your county, your school district, your utility districts — are affected, at least for the duration of the TIF term. One of the fastest ways to derail a TIF project politically is to blindside these entities. Mississippi’s TIF Act requires an estimated impact statement showing the effect on revenues of all taxing jurisdictions within the project area, and it allows municipalities to pursue interlocal cooperation agreements with the county to jointly pledge increment. Economic Development Directors who proactively engage overlapping jurisdictions early in the process — before the public hearing, not after — build the kind of intergovernmental support that keeps projects on track.
Pitfall #5: Going It Alone on Deal Structuring
Here’s the reality: TIF Bond structuring is not a core competency for most municipal economic development offices. You know how to source deals, manage developer relationships, and coordinate across departments. But navigating loan documentation, security agreements, taxpayer agreements, and bond counsel review — especially under a brand-new legislative framework — is specialized work. And mistakes at the structuring stage don’t just delay projects; they can create legal and financial exposure that takes years to unwind. This is exactly why Hageman Capital exists as a resource for Mississippi Economic Development Directors. We bring deep expertise in developer-backed TIF Bond structuring across multiple states, and we understand how SB 2846’s new taxpayer agreement provisions work in practice — not just on paper. Our team has walked dozens of municipalities through the entire process, from initial developer inquiry through bond issuance. And we do it at no cost to the municipality.
Your Next Step: Talk to Our Team
If you’re evaluating a TIF project, fielding a developer inquiry, or simply want to understand how Mississippi’s new legislation changes what’s possible for your community, we’d like to help. Hageman Capital’s Director of Government Relations, Whitney Peterson, works directly with Economic Development Directors across Mississippi to customize TIF strategies for individual municipalities and projects.
There’s no cost, no obligation, and no sales pitch. Our goal is to be the TIF expert in your corner — so you don’t have to be the only one.
Tax Increment Financing is one of the most powerful development tools available to Mississippi municipalities. With the passage of Senate Bill 2846 — effective July 1, 2026 — mayors across the state now have access to a new framework for structuring developer-backed TIF Bonds that shift financial risk off the municipality and onto the private developer. But like any complex financial tool, TIF works best when it’s structured correctly from the start. Getting it wrong can mean stalled projects, political blowback, and missed opportunities for community growth.
At Hageman Capital, we’ve worked with municipal leaders across multiple states navigating the complexities of TIF. Here are the most common pitfalls we see mayors encounter — and how to avoid them.
Pitfall 1: Assuming All TIF Bonds Carry Municipal Risk
One of the biggest misconceptions among elected officials is that approving a TIF Bond means putting the city’s credit on the line. Under Mississippi’s traditional TIF framework, that concern had some basis. But SB 2846 changes the equation. The new legislation authorizes voluntary Taxpayer Agreements that create a contractual payment obligation backed by the developer — not the municipality. These agreements do not constitute public debt, do not count against statutory debt limits, and do not pledge the city’s general credit or taxing power.
The key for mayors is understanding the distinction between municipal-backed and developer-backed TIF Bonds. When structured as a developer-backed bond, the obligation is repaid solely from the incremental property taxes generated by the specific project. If the increment falls short, the developer — not the city — is responsible for covering the gap through a minimum taxpayer agreement. This is a fundamentally different risk profile, and it’s the structure Hageman Capital specializes in.
Pitfall 2: Skipping the “But-For” Analysis
Every TIF project should pass a straightforward test: but for the availability of TIF, would this project happen here? Mayors who skip this step — or accept a developer’s assertion at face value without independent analysis — leave themselves vulnerable to criticism that they gave away public value unnecessarily. Equally important, a strong “but-for” analysis is your best defense in a public meeting or council session when constituents ask why the city is supporting a private development.
Hageman Capital recommends engaging a qualified financial consultant to prepare independent projections of the expected tax increment, the developer’s project feasibility, and the gap that TIF is designed to fill. This isn’t about being adversarial with developers — it’s about building a factual foundation that gives you the confidence to stand behind your decision publicly.
Pitfall 3: Underestimating the Importance of the Redevelopment Agreement
The redevelopment agreement is the central contract governing every TIF transaction, and it’s where most of the protective provisions for the municipality live. Mayors who treat this document as a formality — or delegate it entirely without understanding the key terms — risk approving structures that don’t adequately protect the city.
Critical provisions to pay attention to include the developer’s construction timeline and milestone commitments, the maximum reimbursement amount, the minimum taxpayer agreement requiring the developer to cover any increment shortfall, and remedies for default. Under SB 2846, Mississippi municipalities also have the option to secure taxpayer agreement payments with a lien on the property that carries parity with ad valorem tax liens — a powerful safeguard that should be discussed with bond counsel early in the process.
Pitfall 4: Failing to Communicate the Structure to Constituents
TIF is a nuanced financial mechanism, and public misunderstanding is one of the fastest ways for a good project to lose political support. Mayors who can’t clearly explain how a developer-backed TIF Bond works — and specifically, how it differs from using taxpayer dollars — will find themselves on the defensive at town halls and council meetings.
The most important points to communicate are simple: TIF does not create new taxes. TIF does not raise anyone’s tax rate. The original assessed value continues flowing to every taxing jurisdiction as usual. Only the new increment — the growth that wouldn’t exist without the project — is captured to repay the bond. And under a developer-backed structure, the city carries zero credit risk. Hageman Capital provides municipal leaders with plain-language education materials and talking points designed specifically for public-facing communication, so you’re never caught without a clear answer.
Pitfall 5: Going It Alone Without Expert Support
TIF legislation is new in Mississippi, and the framework introduced by SB 2846 — including taxpayer agreements, lien structures, and conduit bond authority — adds layers of legal and financial complexity that most municipal staff haven’t encountered before. Mayors who try to navigate this without experienced partners risk structural errors that can undermine a deal or, worse, expose the municipality to unintended liability.
This is where Hageman Capital serves as a resource. We work with municipal leaders at no cost, providing TIF structuring expertise drawn from experience across multiple state frameworks. We understand how to structure developer-backed TIF Bonds that protect the municipality, satisfy lender requirements, and give developers the capital certainty they need to break ground. Our goal isn’t to sell you anything — it’s to make sure you have the expertise at the table to get the structure right the first time.
Start the Conversation
If you’re evaluating a TIF opportunity in your community — or simply want to understand how Mississippi’s new developer-backed TIF Bond framework applies to your city — Hageman Capital is here to help. Our Director of Government Relations, Whitney Peterson, works directly with municipal leaders across the state to provide education, structuring guidance, and deal support at no cost.
Your community’s next development project could be the one that transforms your tax base for a generation. Let’s make sure it’s structured right.
If you advise Mississippi municipalities on debt, incentives, or long-term fiscal planning, Senate Bill 2846 should already be on your radar. Signed into law during the 2026 legislative session with an effective date of July 1, 2026, this legislation amends Mississippi’s Tax Increment Financing Act to authorize a fundamentally different approach to financing redevelopment projects — one that shifts the capital burden and credit risk away from the municipality and onto the developer. For financial advisors responsible for protecting the public balance sheet, the implications are significant and worth understanding in detail.
How TIF Works in Mississippi — A Quick Foundation
Tax Increment Financing under Mississippi’s Redevelopment Act allows cities and counties to capture the incremental increase in property tax revenue generated by a new development project and redirect that increment toward repaying the costs of making the project possible. The mechanism does not create new taxes or raise existing rates. It simply isolates the growth in assessed value attributable to the project — the “captured assessed value” — and dedicates that revenue stream to a special TIF fund for a period of up to 30 years. Throughout that period, the original assessed value continues flowing to the municipality, county, school district, and all other taxing jurisdictions exactly as it did before. Mississippi also permits municipalities to pledge a percentage of sales tax collected within the TIF district and attributable to the project, giving financial advisors an additional revenue stream to model when sizing a bond.
What Changes Under SB 2846: Voluntary Taxpayer Agreements
The centerpiece of SB 2846 is the introduction of voluntary Taxpayer Agreements — a contractual mechanism that fundamentally alters the risk profile of TIF obligations in Mississippi. Under the new statute, codified as Section 21-45-23, a municipality may enter into a written agreement with the property owner or developer that creates a binding payment obligation tied to the ad valorem taxes on the project area. These agreements can guarantee, enhance, or otherwise secure the repayment of bonds issued to finance redevelopment costs, provide payments in lieu of or in addition to tax increment revenues, or support any other payment obligation connected to the project.
From an analytical standpoint, the critical provisions are structural. A Taxpayer Agreement does not constitute a tax, fee, or assessment imposed by the municipality. It does not pledge the faith, credit, or taxing power of the state or any municipality. And it does not count as indebtedness for purposes of any constitutional or statutory debt limitation. For advisors modeling the impact of a TIF transaction on a municipality’s credit profile and future debt capacity, that statutory insulation is the headline.
Lien Priority and Enforcement Mechanics
SB 2846 also introduces optional lien security that gives financial advisors meaningful structural protection to evaluate. When a Taxpayer Agreement provides for lien-secured payments, the lien arises automatically upon execution and recordation, carries parity with ad valorem tax liens, takes priority over any subsequent mortgage or encumbrance, and can be enforced and foreclosed using the same procedures applicable to delinquent ad valorem taxes. Recording with the chancery clerk perfects the lien without further action. For advisors accustomed to evaluating collateral packages and enforcement mechanisms in municipal debt, this creates a familiar and enforceable security structure backed by real property — not municipal credit.
Developer-Backed TIF Bonds: How the Structure Works
In a developer-backed TIF Bond transaction under Mississippi law, the municipality issues a TIF note or bond to the developer. The developer then assigns that bond to a lender — such as Hageman Capital — in exchange for upfront capital to fund eligible project costs. The bond is repaid over time solely from the tax increment generated by the completed development, secured by the Taxpayer Agreement, and backed by the developer’s contractual obligation to cover any shortfall in increment revenue. The municipality issues the bond as a conduit — its general credit, taxing power, and general fund are not pledged. The bond does not count against constitutional or statutory debt limits.
For financial advisors, this structure addresses several longstanding concerns. It eliminates the question of whether a TIF obligation will impair the municipality’s bond rating or future debt capacity. It provides an enforceable developer guarantee that backstops increment projections during the riskiest phase of a project — the initial years before full assessed value is realized. And it creates a clear, statutory framework for who holds the risk: the developer and the bondholder, not the taxpayer.
Navigating Implementation: What Advisors Should Be Evaluating
Mississippi’s TIF process involves a defined sequence of steps — from the initial developer inquiry through redevelopment plan adoption, public hearing, governing body approval, original assessed value certification, redevelopment agreement negotiation, and bond issuance. Financial advisors play a central role at nearly every stage. Sizing the bond against projected increment, stress-testing revenue assumptions, evaluating developer financial viability, coordinating with overlapping taxing jurisdictions, and ensuring statutory compliance with the Redevelopment Act all fall within the advisor’s scope.
Under SB 2846, advisors should also be evaluating the terms of the Taxpayer Agreement itself — including the payment schedule, the shortfall guarantee, the lien provisions, and how those obligations interact with any existing debt covenants. The legislation permits a maximum term of 30 years, and the municipality retains full discretion over whether to enter into a Taxpayer Agreement at all. Engaging experienced bond counsel early in the process is essential, particularly given that Mississippi operates under Dillon’s Rule, meaning municipalities must ensure strict statutory compliance at every step.
A Resource Built for Your Role
Hageman Capital works alongside municipal financial advisors as a free expert resource throughout the TIF Bond process. Our team brings deep experience in TIF bond structuring across multiple state legislative frameworks, and we speak the same language — bond sizing, increment modeling, coverage ratios, and statutory compliance. Whether you’re advising on your first developer-backed TIF Bond under SB 2846 or evaluating how the new Taxpayer Agreement provisions apply to a deal already in progress, we’re here to help ensure the structure is sound, the analysis is rigorous, and the municipality is protected. There’s no cost and no obligation — just experienced TIF Bond professionals who understand what it means to be the last line of financial defense for the public.
If you serve on a city council in Mississippi, there’s a strong chance a Tax Increment Financing proposal will land on your agenda in the coming months. Senate Bill 2846, signed into law and effective July 1, 2026, expands how Mississippi municipalities can use TIF — and introduces a structure that fundamentally changes who carries the financial risk. Before you cast that vote, here’s what you need to know.
TIF at a Glance: No New Taxes, No Rate Increases
Tax Increment Financing is not a new tax. It doesn’t raise anyone’s property tax rate, and it doesn’t pull money away from your city’s existing revenue. Instead, TIF captures the increase in property tax revenue that a new development generates — the “increment” — and directs that increase toward paying for costs associated with making that project possible.
Here’s a simple way to think about it. Before a project breaks ground, the land generates a baseline amount of property tax revenue each year. That baseline is called the original assessed value, and it continues flowing to the city, county, school district, and every other taxing jurisdiction exactly as it always has. After the project is built, the property is worth more, so property taxes go up. The difference between the new, higher amount and the original baseline is the increment. Under TIF, that increment is set aside in a dedicated fund and used to repay the eligible project costs — infrastructure, site preparation, public improvements, and other qualifying expenses. When the TIF period ends (a maximum of 30 years under Mississippi law), all revenue, including what had been the increment, flows back to every taxing jurisdiction in full.
Nothing is taken from anyone. TIF only redirects revenue that wouldn’t exist without the project in the first place.
What Changes Under the New Law: Developer-Backed TIF Bonds
This is where SB 2846 makes a meaningful difference for council members evaluating a TIF proposal.
Under the new legislation, Mississippi municipalities can now enter into what the statute calls “taxpayer agreements” — voluntary, binding contracts between the municipality and the developer. In a developer-backed TIF bond structure, the municipality issues a TIF bond to the developer. The developer then sells that bond to a capital provider, receiving upfront cash to fund construction. The bond is repaid over time solely from the tax increment the completed project generates.
The critical distinction: this bond does not constitute a general obligation of the municipality. It does not pledge your city’s credit, taxing power, or general fund. It does not count against constitutional or statutory debt limits. The developer, not the city, carries the repayment obligation. And under the new taxpayer agreement provisions, the developer is contractually required to make up any shortfall if the increment falls short of debt service — a safeguard that didn’t previously exist in Mississippi’s TIF framework.
In plain terms, the risk shifts from taxpayers to the party building the project.
What Qualifies for TIF in Mississippi
Not every piece of land qualifies for a TIF bond. Mississippi’s TIF Act requires the project area to meet at least one of five statutory criteria: areas with blighted or deteriorated conditions, sites with buildings of historical preservation value, areas with defective street or lot layouts that impair growth, projects certified under the Regional Economic Development Act, or — and this is the broadest category — areas where construction, renovation, or rehabilitation is determined to be in the public interest.
That last category gives your governing body significant flexibility. If the council believes a project serves an important public purpose, the public interest finding can support TIF eligibility even if the area doesn’t meet a traditional definition of blight.
Eligible costs are equally broad: land acquisition, demolition, infrastructure installation, public improvements, planning and engineering, and under the new law, even the construction and equipping of private improvements when undertaken in connection with a taxpayer agreement.
What Council Members Should Ask Before Voting Yes
A well-structured TIF proposal should be able to answer every one of these questions clearly:
Does this project genuinely need TIF assistance to be viable — the “but-for” test? What is the projected increment, and does it provide adequate coverage for the bond’s debt service? What public benefits will the project deliver — jobs, infrastructure, blight elimination, expanded tax base? Is the developer financially capable of completing the project and honoring a taxpayer agreement? Has the municipality engaged independent financial analysis to verify the revenue projections? And does the redevelopment agreement include enforceable safeguards, reporting requirements, and remedies for default?
If any of those questions can’t be answered with specificity, it’s worth pressing for more information before the vote reaches the floor.
Your Role in the Process
Mississippi law requires a public hearing before any TIF plan can be approved, with published notice at least 10 days in advance. That hearing is your constituents’ opportunity to review the plan, ask questions, and raise concerns. As a council member, your vote to approve the redevelopment plan and TIF plan by resolution or ordinance is what sets the entire process in motion — from the clerk’s certification of the original assessed value through bond issuance and project construction.
You are also the safeguard. The governing body has the authority to require a “best interest” finding, to negotiate the terms of the redevelopment agreement, and to ensure oversight mechanisms are built into the deal from the start.
A Tool Worth Understanding
TIF is one of the most effective economic development tools available to Mississippi municipalities — and the new developer-backed bond structure makes it significantly more accessible and lower-risk for cities of all sizes. The increment only exists because the project exists. The developer carries the financial obligation. And the community gains jobs, infrastructure, and a growing tax base without putting public credit on the line.
The vote will come. When it does, understanding how this tool works — and what protections are built in — is the difference between voting with confidence and voting in the dark.
