TIF Expertise: Common Pitfalls for Mississippi City Council Members to Avoid

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 access to good information. Hageman Capital works with municipal leaders across the country as a free educational resource on TIF Bond structuring — helping bridge the gap between what developers need and what your community deserves. Based on what we’ve seen across multiple states and TIF transactions, here are some of the most common areas where council members may want to pay close attention.

Pitfall #1 — Confusing Developer-Backed TIF Bonds With Municipal Debt

One of the most common misconceptions we encounter is the assumption that approving a TIF Bond means the city is taking on debt. Under SB 2846, that’s 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 is happy to share educational materials that explain this distinction in plain language — resources your team can use however is most helpful.

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. If you’d like to understand how these taxpayer agreements are typically structured and what protections they offer, Hageman Capital is available to walk through the details as a supplemental resource for your team’s own evaluation.

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. This is one of the areas where having a clear, jargon-free explanation ready can make a meaningful difference in constituent conversations, and Hageman Capital has resources available that may be helpful as you and your colleagues prepare for those discussions.

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 it can be difficult to know where to start if you haven’t worked with TIF before. Based on our experience, here are some of the questions that tend to surface the most important information: 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 kinds of questions that demonstrate diligence, build public trust, and help ensure an informed vote. Hageman Capital is happy to share additional context on any of these topics if it would be useful to your preparation.

Pitfall #5 — Not Knowing Where to Turn for TIF-Specific Guidance

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. Your municipality’s own legal counsel, financial advisors, and internal staff are the right people to guide your decision-making. Hageman Capital’s role is simply to supplement that expertise with TIF-specific knowledge. We’ve worked with developer-backed TIF Bond structures across multiple states and are happy to share what we’ve learned — whether that’s background on how SB 2846 works, insight into how similar projects have been structured elsewhere, or just a sounding board as your team evaluates a proposal. We’re not here to replace anyone on your team; we’re here to make sure TIF-specific expertise is available to you at no cost.

Start the Conversation

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 as a resource. Whitney Peterson, our Director – Government Relations, works directly with municipal leaders to answer questions, share educational materials, and walk through the specifics of how TIF works in your state. There’s no cost and no obligation. Request a meeting with Whitney here and take the first step toward voting with confidence.