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 friction, and missed opportunities for community growth.

At Hageman Capital, we’ve worked with municipal leaders across multiple states navigating the nuances of TIF. Based on that experience, here are some of the areas where we’ve seen mayors benefit from closer attention.

Pitfall 1: Assuming All TIF Bonds Carry Municipal Risk

One of the most common 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 distinction is 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 one that Hageman Capital has deep experience with across multiple states.

Pitfall 2: Skipping the “But-For” Analysis

Every TIF project benefits from a straightforward test: but for the availability of TIF, would this project happen here? When this step is skipped — or a developer’s assertion is accepted at face value without independent analysis — it can leave municipal leaders vulnerable to criticism that public value was given away unnecessarily. Equally important, a strong “but-for” analysis is one of the best tools available for a public meeting or council session when constituents ask why the city is supporting a private development.

In our experience, 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 can make a meaningful difference. This isn’t about being adversarial with developers — it’s about building a factual foundation that supports confident public decision-making.

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. When this document is treated as a formality — or its key terms aren’t fully understood by the decision-makers approving it — there’s a risk of approving structures that don’t adequately protect the city.

Critical provisions worth paying close 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 is worth discussing 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. Being able to clearly explain how a developer-backed TIF Bond works — and specifically, how it differs from using taxpayer dollars — can make a significant difference in maintaining community confidence.

The most important points to communicate are straightforward: 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 has plain-language educational resources available that may be helpful as you and your team prepare for public-facing conversations about TIF.

Pitfall 5: Navigating TIF Without TIF-Specific Expertise at the Table

Mississippi’s new TIF framework — including taxpayer agreements, lien structures, and conduit bond authority — introduces legal and financial considerations that may be new to your municipality’s existing team. Your city’s legal counsel, financial advisors, and staff are the right people to guide your decisions, and they bring essential knowledge of your community’s specific needs and circumstances. What Hageman Capital offers is a supplement to that existing expertise: TIF-specific knowledge drawn from working with developer-backed bond structures across multiple state frameworks.

We work alongside your municipality’s advisors — not in place of them. Our role is to share what we’ve learned about how these structures work in practice, help your team evaluate the TIF-specific elements of a proposed deal, and make sure the specialized knowledge needed for developer-backed bond structuring is accessible at no cost to your city. It’s a collaborative approach, and one that we’ve found works well when a municipality’s trusted advisors and TIF-specific expertise are both at the table.

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 available as a resource. Whitney Peterson, our Director – Government Relations, works directly with municipal leaders across the state to share TIF-specific insight and educational resources at no cost.

Your community’s next development project could be the one that transforms your tax base for a generation. Request a meeting with Whitney here to start the conversation.