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As mentioned above, once a TIF is approved, typical State laws require that certain benchmarked taxes and fees generated within the TIF district must be split into "base revenue" and "incremental revenue," with the base revenue being deposited into the general fund and the incremental revenue being deposited into an account dedicated to the TIF infrastructure project. Of course, achieving the desired outcome within the established budget requires that the TIF infrastructure project itself must be administered with care. This "project administration" is somewhat separate from the TIF itself. Therefore, the key TIF administrative functions are:
Establishing a separate account for incremental revenue.
Accounting for the base revenue and incremental revenue generated within the TIF district.
Ensuring that tax increments are spent on permissible actions or interventions within the TIF district itself.
The tax increment represents funds generated within the TIF district and, with few exceptions, State and local laws will require that these funds must be spent on approved projects or activities within the district to benefit the district.
