Removing aging and failing dams that no longer serve a useful purpose can simultaneously eliminate a hazard and provide environmental benefits from restoring rivers to their natural conditions. In some cases, removing a dam reconnects a community to its local river and brings enhanced recreation opportunities. Dam removals have been part of river redevelopment projects in several cities and towns in the midwestern United States.
In this Issue Brief, which is one of four on funding approaches for dam removal, I describe state and local government approaches. The report begins with a description of several state programs currently in use. It then describes how states might use dedicated revenue sources in general and the strengths and weaknesses of various approaches. At the local level, options are often more limited, but I describe some creative tax-financing approaches and how one option, tax-increment financing (TIF), has been used in a few communities for economic development projects, involving dam removal. This is one in a series of four RFF issue briefs on alternative funding approaches for dam removal. See Walls and Shabman (2020) for an introduction to the series.