Analysis of Capacity for Implementation of TIF Projects for Electric Transport Development in Russian Cities

Abstract

Cities in Russia are faced with a burning problem of procuring funds for public transit and transport infrastructure projects. The article aims to evaluate the possibility of using Tax Increment Financing (TIF) in various cities of Russia by calculating property tax revenue increments from a TIF project and designating the increments as a protected source of funds for recouping investments in the project. The authors proceed from a hypothesis that it is possible to justify the priority of the city’s fiscal capacity for TIF adoption over its land area and the size of its population. The study analyzes a major TIF project that was implemented in the field of public transportation. The outcomes of the project were extrapolated to transport projects in other cities in Russia. Calculations show that the majority of the cities included in the study fit the criteria for TIF projects. The study proves that calculating the projected costs of TIF-funded projects for the development of electric public transport enables the grouping of the cities by potential for TIF project implementation. At the same time, other characteristics of cities, such as the size of population, are not the determinants of such potential. The valuation of TIF potential could serve as a basis for a rapid feasibility study of a TIF project in a city, removing the need for laborious calculations.