Structuring Your TIF: What It Means for Mississippi Mayors

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.