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This article examines tax increment financing (TIF) in Kansas City and St. Louis, two heavy users of the tool under the same statutory authority. Based on a complete database of TIF projects through 2013 (2012 for Kansas City) and numerous interviews with local government officials in both metropolitan areas, we explore the TIF use of these two cities, which have different structural aspects and have gone through sharp policy changes, to examine if central cities that use different strategies beget different outcomes in their suburban areas. We document distinctly different patterns of use in the two central cities. When St. Louis dramatically increased its TIF use under Mayor Francis Slay, the number of projects per year in the suburbs increased. Kansas City suburbs appeared to fill the gap in TIF use when the city sharply decreased its use of TIF under Mayor Mark Funkhouser. More research is needed to determine the factors that drive these mixed effects and if they hold true by context and in other metropolitan areas.

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This document was originally published in Cityscape by the U.S. Department of Housing and Urban Development. Copyright restrictions may apply.