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

Nebraska’s governing body members vote on two critical TIF decisions: the substandard and blighted declaration and the redevelopment plan approval. Here are common pitfalls to watch for before casting those votes.

Pitfall 1: Voting Without Understanding the Blight Findings

The substandard and blighted declaration is the legal foundation for TIF in Nebraska. Before voting, review the blight study and understand which statutory factors are present. If the study’s findings are marginal, the declaration may be vulnerable to challenge — and without it, the TIF cannot proceed. Ask questions and ensure the study genuinely supports the declaration.

Pitfall 2: Confusing TIF With a Tax Diversion From Schools

The most common misconception: TIF takes money from schools and services. In Nebraska, the base value of property taxes continues flowing to every taxing body as usual. Only the excess value — revenue generated by the new development that would not exist without the project — is captured for the TIF period. Interest and penalties on delinquent taxes go to the taxing bodies, not the TIF fund. When the TIF period ends, all revenue flows permanently to every jurisdiction at the new, higher assessed value.

Pitfall 3: Not Reviewing the Cost-Benefit Analysis

Nebraska requires a cost-benefit analysis evaluating tax shifts, infrastructure impacts, employment effects, and whether the project is in the community’s long-term interest. This is your primary analytical tool — if it does not convincingly demonstrate the but-for case, that is a red flag regardless of how attractive the project appears.

Pitfall 4: Not Holding the CRA Accountable for the 30-Day Notice

The CRA must give the governing body 30 days’ written notice before accepting a redevelopment contract. This is your window to review the deal terms. If the CRA attempts to bypass this requirement, insist on compliance — it is your statutory right and exists to protect the public interest.

Pitfall 5: No Ongoing Oversight

After approval, ensure the CRA monitors construction progress, increment performance, and contract compliance. Your oversight role continues beyond the vote.

Hageman Capital provides free TIF education to Nebraska governing body members. Request a meeting with Whitney Peterson for clarity before your next TIF vote.