State tax increment financing statutes allow cities to create special development districts that allow special tax breaks to generate growth. The city creates the district and makes improvements to public facilities within those districts to stimulate private-sector investment. During the development period, the city freezes the tax base at predevelopment levels. Businesses continue to pay property taxes, but taxes derived from increases in assessed property values (the tax increment) as the result of new development either go into a special fund created to retire bonds or help stimulate future growth in the district. Examples of tax increment financing can be found in South Carolina, Illinois, Michigan and the District of Columbia.