Infrastructure First TIF Plan
Tax Increment Financing Information and Frequently Asked Questions
Ballot Proposal 1
November 3, 2026 Election
What is Tax Increment Financing?
Tax Increment Financing, or TIF, is a financing tool authorized under Michigan law. It is not a separate tax or an additional millage. Instead, it determines how a portion of existing property tax revenue generated within a defined district is distributed.
When a TIF district is established, a base taxable value is set. Taxing jurisdictions continue to receive the tax revenue associated with that base value. As taxable value within the district increases above the base, eligible property tax revenue generated by that growth—the “tax increment”—can be captured and used for purposes identified in the approved TIF and development plan.
For a Downtown Development Authority, TIF revenues can be used for eligible public improvements and activities identified in the plan. In the City of Traverse City, TIF has supported public infrastructure and improvements including streets, sidewalks, streetscapes, parking infrastructure, riverfront improvements, public spaces and other eligible downtown investments.
Infrastructure First TIF Plan Ballot Proposal
The Infrastructure First TIF Plan is a proposed financing plan for eligible public infrastructure in the downtown Traverse City. Under the proposed structure, 70% of the applicable tax increment in the definded district would be captured for the TIF plan and 30% would be distributed to participating taxing jurisdictions, including a share to the City’s General Fund. The proposal plan will go before voters at the November 3, 2026 election.
About TIF and the Proposed Plan
- TIF is a public infrastructure financing and tax revenue-sharing tool available to the City; it is not solely a DDA funding mechanism.
- TIF should be discussed within the City's broader financial structure alongside the General Fund, utility funds, grants, bonds, state and federal resources, and other funding mechanisms.
- The DDA is a component unit of the City. Its budget is approved by the City Commission, and infrastructure projects under the plan require City Commission approval.
- The proposed plan changes the revenue-sharing structure: 70% of the applicable tax increment would be captured for the TIF plan and 30% would be distributed to participating taxing jurisdictions. The City’s portion of that 30% would flow to the General Fund and the Act 345 Police Fire Pension Fund
- The plan is focused on eligible public infrastructure in the urban core and includes a dedicated source of funding for eligible stormwater management investments within the district—something the City has not historically had.
- The plan aligns eligible infrastructure investments with the City’s Strategic Action Plan and City Commission OKR Work Plan. As the City develops long-term financial plans and three-year projections, strategic initiatives must be matched with funding sources; the General Fund cannot independently fund every infrastructure and strategic priority.
Frequently Asked Questions
Is TIF DDA Money?
TIF is administered through the DDA, but the DDA is a component unit of the City. Its budget is approved by the City Commission, and infrastructure projects under the plan require City Commission approval. From the City’s financial perspective, TIF is one of several tools available to fund eligible city public infrastructure projects.
What does 70/30 mean?
Under the proposed structure, 70% of the applicable tax increment would be captured for the TIF plan. The remaining 30% would be distributed among the participating taxing jurisdictions. The City’s portion would flow to the General Fund. The City Treasurer’s Office collects and distributes the tax revenue; the DDA does not directly collect or distribute it. The current plan, TIF 97, captures 100%.
Why does the City need multiple funding sources?
The City has long-term infrastructure and strategic priorities that must be matched with sustainable funding sources. As we develop long-term financial plans and three-year projections, we look at the full range of available funding sources. The General Fund supports essential services and many competing needs, so it cannot independently fund every infrastructure and strategic initiative.
What is different about this plan?
The plan is focused on infrastructure and stormwater management is addressed in the Infrastructure First TIF Plan, including a dedicated funding source for eligible stormwater investments within the district. The City has not historically had a dedicated funding source for stormwater infrastructure.
Will the City lower taxes if TIF is not approved by the voters?
There is no indication that property taxes are going up or down if TIF passes or does not pass.
Where are the dollars captured for TIF?
TIF captures eligible tax increment generated only from properties within the defined TIF district. Property tax revenue generated by properties outside the district is not captured through that TIF plan.
Does TIF give money to private developers?
Under Michigan Law, TIF can only be used to fund public infrastructure. TIF funds cannot be directly granted to private developers for private development projects
Ballot Proposal One
The City Charter of the City of Traverse City provides that the City or City Commission shall not adopt or approve any proposal to create a Tax Increment Financing (TIF) plan, or to modify, amend or extend an existing TIF plan until such proposal is approved by a majority of city electors at a regular or special election held for that purpose. The City of Traverse City has received a recommendation to amend and extend a TIF plan from Traverse City Downtown Development Authority, which TIF plan is on the City Clerk’s web page and on file at the City Clerk’s Office and available for public inspection. The proposed amended and extended TIF district will remain the same and is generally described as being bound by the following streets and landmarks: Lake Michigan Shoreline, East Front Street, Railroad Avenue, Boardman Avenue, Washington, Cass, the Boardman/Ottaway River, and Gillis Street, with a projected total capture of $ 139,959,327, which is an estimate only, to be used for the purposes allowed under Michigan’s Tax Increment Financing Act.
Shall the Traverse City Downtown Development Authority Infrastructure First Development and Tax Increment Financing Plan, submitted by Traverse City Downtown Development Authority, be amended and extended to be in effect for a term of twenty (20) years beginning January 1, 2028, and ending December 31, 2047?