TIF Expertise: Common Pitfalls for Nebraska Municipal Finance Advisors to Avoid

Nebraska’s Community Development Law creates a defined TIF framework with unique characteristics that shape your financial analysis. Here are the pitfalls Hageman Capital sees financial advisors encounter most frequently.

Pitfall 1: Not Accounting for the Ad-Valorem-Only Framework

Unlike multi-revenue-stream states, Nebraska TIF captures only real property taxes. Your increment projection depends entirely on assessed value growth — making accurate property valuation estimates and conservative development timeline assumptions critical. There is no sales tax or franchise fee cushion to offset underperformance in property assessments.

Pitfall 2: Underestimating Assessment Risk

Under prior law, a property owner within a TIF district could challenge their property assessment, reducing the excess value and the increment available for debt service. LB 1135, signed into law in April 2026, directly addresses this risk — taxpayer agreements can now contractually limit assessment challenges, providing greater revenue certainty. For projects structured under LB 1135, factor this protection into your models. For any remaining legacy structures, conservative assessment assumptions remain essential.

Pitfall 3: Confusing CRA Bonds With City Debt

CRA bonds are general obligations of the CRA, not the city. However, traditional CRA general obligation bonds do expose the CRA’s broader revenue base to bondholder claims. LB 1135 introduced conduit revenue bonds as a new option that isolates project-specific risk — these are payable solely from pledged project revenues rather than the CRA’s general assets. When evaluating a multi-project CRA, assess which bond structure is in use and the cumulative exposure accordingly.

Pitfall 4: Missing the July 1 Filing Deadline

The Notice to Divide Tax must be filed by July 1 on the prescribed form. Missing this deadline means the taxes remain undivided for the entire tax year — a costly delay. Verify the filing is complete and timely as part of your closing checklist.

Pitfall 5: Weak Cost-Benefit Analysis

The cost-benefit analysis must evaluate tax shifts, infrastructure impacts, employment effects, and other factors. A superficial analysis that does not genuinely demonstrate the but-for case creates legal risk and undermines your recommendation. Build a thorough analysis that withstands public scrutiny.

Hageman Capital works alongside Nebraska financial advisors at no cost. Request a meeting with Whitney Peterson for a technical consultation.