TIF Expertise: Common Pitfalls for Mississippi Mayors to Avoid

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.