HAVRE — Residents in Havre may have recently heard the term “TIF district” used in connection with downtown redevelopment… but what exactly does that mean?
TIF stands for Tax Increment Financing, a tool communities use to fund infrastructure improvements and redevelopment projects in specific areas without raising taxes.
Madison Collier reports from Havre - watch the video here:
While TIF districts are common in larger Montana cities, Havre is using the tool for the first time as part of a broader effort to reinvest in its downtown core.
How Tax Increment Financing works
Tax Increment Financing operates within a designated urban renewal district, or URD. In Havre, that district is based on the city’s downtown master plan, with boundaries drawn to include areas identified as having strong redevelopment potential.
According to Sarah Strissel, Director of Community Planning and Brownfields at Bear Paw Development Corporation, the process starts by setting a baseline for property taxes within the district.
“TIF stands for Tax Increment Financing, and it’s a financing component within an urban renewal district,” Strissel explained. “It’s used to raise money within the boundaries for redevelopment.”
That baseline is based on existing property values. As redevelopment occurs and property values increase over time, the increment, the amount above the original tax base, is captured and placed into a dedicated fund.
Those funds can then be reinvested back into the district for approved projects.
Does this raise taxes?
One of the most common concerns surrounding TIF districts is whether they result in higher taxes for residents. Local officials say that is not the case.
“It’s not a tax increase,” Strissel said. “Taxes are collected the same. Every taxing jurisdiction gets the same base amount. It’s just capturing the increment over the next 15 years to reinvest in downtown.”
Property owners within the district continue to pay taxes as usual. The difference is where future growth in tax revenue is directed.
Paul Tuss, Executive Director of Bear Paw Development and House District 28 representative, echoed that point.
“Your taxes aren’t going up because of this,” Tuss said. “We’re simply capturing any incremental increase in the taxes that you’re already paying and channeling those dollars into rehabilitating downtown.”
Why Havre is using a TIF district
Downtown Havre, like many rural communities across Montana, faces challenges tied to aging infrastructure.
“Our downtowns were constructed 130 years ago, and oftentimes our infrastructure is just that old,” Tuss said. “This is a wonderful tool in the toolbox for communities to identify a district that needs some help and then finance it through the tax increment finance mechanism.”
While TIF districts are widely used in larger cities, implementing one in a smaller community requires careful planning. Havre’s smaller tax base means district boundaries had to be drawn strategically to allow meaningful reinvestment without negatively impacting other taxing jurisdictions.
Strissel said planning for the district has been discussed locally for years, but funding to move it forward was a major barrier.
“It’s something that Havre has been looking at for about 20 years,” she said. “There’s a lot of work that goes into actually implementing one, and there just hasn’t been the funds to hire somebody to do it.”
A 2024 Pilot Community Tourism Grant allowed Bear Paw Development to hire a consulting firm and formally establish the district.
What kinds of projects could be funded?
Under state law, a traditional urban renewal district with a TIF component can remain in place for up to 15 years. During that time, funds generated by the increment can be used for a range of downtown improvements.
Tuss said those projects could include sidewalk upgrades, lighting, façade improvements, signage, and other infrastructure or beautification efforts designed to improve the look and function of downtown.
“We’ve gone through the process of creating the district,” Tuss said. “Now we have to wait for that increment to come in, so we’ll have an appropriate pot of money that we can utilize.”
The specific projects funded will depend on available revenue and community priorities.
What residents should know moving forward
Both Strissel and Tuss emphasized that public understanding is key as the district moves forward.
“I think just reaching out with any questions,” Strissel said. “There are a lot of misconceptions that go into establishing a TIF district, and we’ve done a pretty good job of addressing those.”
Bear Paw Development has published maps, fact sheets, and additional explanations online to help residents understand where the district applies and how the financing works.
See more on the implementation and preparation from Bear Paw Development Corporation by clicking here.
Tuss said the district should be viewed as a long-term investment.
“This is just one more piece of the economic development puzzle in rural Montana,” he said, “to make sure that we do have the tools to make our communities competitive and wonderful places to live and build a business.”
The Bear Paw Development Corporation also releases educational podcasts. In an episode from November 30th, 2025, they covered the ideas that went into the decision regarding the URD and TIF District.
You can listen to it here:
