TIF Overview for Tennessee Mayors

If you are a Tennessee mayor who has heard the term “developer-backed TIF Bond” but has not yet had the chance to explore what it means for your community, this overview is for you. SB 1760, signed into law during the 2026 legislative session, introduced new tools that make Tax Increment Financing one of the most powerful and lowest-risk economic development instruments available to your city. Here is what you need to know at a high level.

What TIF Is and What It Is Not

Tax Increment Financing captures the increase in property tax revenue generated by a new development project and directs that increase toward paying for eligible project costs. It does not create new taxes. It does not raise anyone’s tax rate. The base amount of property taxes — everything your city and county were collecting before the project — continues flowing to all taxing jurisdictions as usual. Only the increment, the growth that would not exist without the development, is set aside for a limited period to support the project.

When the TIF period ends (up to 20 years for IDB projects or 30 years for Housing Authority projects), all tax revenue — including what was the increment — flows back to the taxing jurisdictions permanently. The result is a larger tax base generating more revenue for your city, schools, and county than existed before the project was built.

What Changed With SB 1760

The new legislation authorizes taxpayer agreements — binding contracts where the developer guarantees repayment of TIF bond debt. If the actual tax increment falls short of what is needed to cover the bond payment, the developer makes up the difference. The taxpayer agreement lien runs with the land, carries first-priority status over any mortgage, and is enforceable as real property taxes. This means the municipality bears zero financial risk on the bond — the developer is contractually and legally on the hook.

What This Means for Your Role as Mayor

As mayor, you are the public face of economic development in your community. Your role in TIF is to champion projects that serve the community’s interests, work with your economic development team to evaluate proposals, and ensure the governing body has the information needed to make sound decisions. You are not expected to be a TIF expert — that is what professional advisors and resources like Hageman Capital are for.

What you should be able to communicate to your council and constituents is straightforward: TIF does not spend public money, does not redirect existing tax revenue, and under the new taxpayer agreement structure, does not put the city’s credit at risk. It is a tool that turns developer investment into long-term community growth — more jobs, more tax revenue, and better infrastructure.

Getting Started

Hageman Capital provides free TIF education and structuring guidance to Tennessee mayors. Whether you have a specific project in mind or simply want to understand the landscape before a developer comes knocking, our team is available to help. Connect with Whitney Peterson, our Director – Government Relations, to schedule a no-cost consultation and start exploring what developer-backed TIF Bonds can do for your city.