A top state official supports a funding mechanism for communities, but believes there is some room for improvement.

Iowa Economic Development Authority Director Debi Durham says tax increment financing (TIF) is a tool that local governments use effectively to drive progress. However, she believes there needs to be some reform to the program.

“One of the reforms is, when you’re doing a new greenfield site and you use TIF for infrastructure, which is what it is designed for, because of the Urban Renewal rules about LMI (low to moderate income) it’s very difficult to make that work out. So the percentage is too high and so that’s something they (the legislature) need to deal with.”   

When the Iowa Legislature convenes in January of 2026, Durham thinks lawmakers will be talking about property tax reform, along with discussions on TIF, which IEDA wants to keep around.

“But we are going to be there lending a voice that, ‘You need to keep the tool of TIF, the integrity of TIF.’ And then show examples of communities (that use TIF well), and I think you’re one of them (city of Jefferson) that actually uses it pretty responsibly.”   

Durham adds that seldom are there “bad actors” that abuse TIF, but that it is supposed to be used for infrastructure needs for a community and as a temporary way to pay for those items to achieve economic development success.