In the near future, I plan to introduce legislation to modernize Pennsylvania’s Tax Increment Financing (TIF) laws and provide municipalities with an additional, voluntary economic development financing tool while protecting taxpayers and local governments from additional financial exposure.

Under current law, municipalities may establish tax increment districts to support eligible redevelopment and economic development projects. My legislation would build upon this existing framework by incorporating a financing structure that has been successfully deployed in other states to help advance significant economic development and redevelopment projects.

These models provide communities with greater flexibility to leverage future project-generated revenues and voluntary payment commitments to attract private investment and finance eligible development costs. By adapting a framework that has proven effective elsewhere, Pennsylvania can provide municipalities, authorities, and developers with another tool to help close financing gaps, accelerate investment, and move economically beneficial projects forward.

The legislation would establish a clear statutory structure for these voluntary tax agreements while preserving local control and ensuring that participation remains entirely optional. Nothing in the legislation would require a municipality or authority to enter into an agreement, nor would the legislation pledge the credit or taxing power of the Commonwealth or a municipality. The intent is to expand Pennsylvania’s economic development toolkit without creating a new taxpayer-funded obligation.

The legislation would also establish appropriate enforcement and lien provisions so that obligations voluntarily undertaken through a tax agreement can be reliably enforced and financed. By creating a clear statutory framework, Pennsylvania can provide communities and developers with a financing tool capable of converting anticipated future revenues and contractual payments into private investment for projects today. Under the proposed structure, a developer may enter into a voluntary tax agreement with a municipality or authority, allowing the future payments committed under that agreement to support financing provided upfront by a private investor and repaid over time from those agreed-upon revenues.

At the same time, the legislation will establish an important limitation on the use of TIF incentives. Data center development projects will be expressly prohibited from qualifying for tax increment financing under Pennsylvania law. Data centers can involve extraordinarily large capital investments and substantial demands on local infrastructure while frequently generating comparatively limited permanent employment. TIF resources should remain focused on projects where the use of future local tax revenues is justified by broader community redevelopment and economic development benefits.

This legislation is designed to strengthen Pennsylvania’s economic development toolkit while preserving local control, protecting taxpayers and ensuring that TIF financing is directed toward appropriate projects.

I invite you to join me in co-sponsoring this legislation.