Tax Increment Financing ("TIF") is a statutorily authorized mechanism which enables municipalities to earmark the property tax revenue from designated areas to pay for things such as infrastructure improvement. Lately, Maine municipalities have been using TIF to refund tax revenues directly to private developers in an effort to attract new business. This Comment will begin by briefly explaining the development of TIF in the United States and how it has evolved over time. It will then summarize how TIF works in Maine and the criticism and praise it has received throughout its existence. Next, it will look at research examining the efficacy of TIF around the country and in Maine. This Comment will argue that (1) TIF should be used for infrastructure improvements and job training, not to reimburse developers; (2) the maximum time limit for a TIF agreement should be lowered from thirty years to twenty years; (3) the state should limit the use of TIF to mitigate the impact it has on surrounding communities; and (4) the state should set job standards for business that benefit from TIF. Finally, this Comment will end by suggesting strategies for small Maine towns to make the most of TIF as it currently exists.

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