Our Economic Tool - Tax Increment Financing District (TIF)
Tax increment finance is a financing and development tool that permits local governments to capture future increases in property and other taxes generated by new development within a specified development area. In Kentucky, taxes collected by the State also are eligible to be directed back to the city, which is a completely new revenue source for the city. The captured value of the increase in tax revenues is used to finance public improvements and to attract private development projects. Eligible public expenditures include parks and open space, public parking, transportation and pedestrian improvements, and environmental remediation on historic properties. To learn more about TIF Districts in Kentucky, read the Kentucky League of Cities TIF Explanation.
Paducah's Tax Increment Financing (TIF) Frequently Asked Questions
TIF Timeline
March 2019 - The City of Paducah and McCracken County passed a resolution and executed an agreement to establish the area’s first Tax Increment Finance District (TIF).The district incorporates approximately 315 acres of downtown Paducah and the riverfront.
August 2019 - Paducah received Preliminary Approval by the Kentucky Economic Development Finance Authority (KEDFA) for Paducah’s Downtown Riverfront TIF District. The TIF agreement, as authorized under KRS 154.30, is between the City and the Kentucky Economic Development Finance Authority (KEDFA). The goal of Paducah’s TIF is to revitalize the downtown area by capturing state dollars and reinvesting local dollars.
March 2021 - Paducah received Final Approval by KEDFA. News Release - Final Approval of Paducah's TIF
2025 - By the end of 2024, the City reached the capital investment threshold necessary to activate the State’s portion of the tax increment financing district (TIF) for downtown Paducah. As part of the agreement to fully activate the TIF so that Paducah would receive distributions from the State, a milestone of reaching $20 million of capital investment (public and private investment) was set. Since the City met the milestone before the March 2025 deadline, the TIF is activated and the State will make payments to the City. In 2019, a baseline of state revenue generated in the district was calculated at $575,117 which includes property, sales, and withholding taxes. Now that the TIF is activated, a new state revenue number will be established, and each year for 20 years, half of the difference between the State’s new revenues and the baseline revenues (adjusted with the consumer price index) will be available to be distributed to the City. This “increment” will be used to improve the district. The maximum amount that the State would pay to the City of Paducah over the life of the 20-year agreement is $21 million.
Please watch the 2-minute video below to learn the structure of Paducah's TIF and the benefits.
History of the 100 Block of Broadway
In the following River Revelations video produced by Paducah 2 through the administration and facilities of West Kentucky Community & Technical College, learn about the history of the 100 block of Broadway including the businesses that at one time graced the block, the plans for the block that never came to fruition, and how it became a parking lot with potential.
