HOULTON, Maine – The Houlton Tax Increment Financing Committee’s final report, presented to the town council on Monday night, concluded that modifying the town’s TIF districts will benefit the town financially in the coming years.
The council appointed the committee earlier this year, to evaluate the town’s current TIF program and whether it generated an economic development advantage for the town as well as charting a way forward.
After many meetings, the committee concluded that renewing districts that are nearing the end of their terms and continuing others, all with modifications in size and/or focus, for another 10 years will help the town keep and attract new business as well as fund much needed infrastructure projects.
TIF is a public financing method used to subsidize infrastructure and other community improvement projects by capturing the future tax benefits, resulting from the growth and investments made in designated districts.
Previously, the council was not as active in exploring how TIF funds were used and this past spring several experts recommended the town take a hard look at how the districts were operating and how the town was using the funds created.
The TIF program as implemented in the mid-2000’s has served to foster economic development, job growth, job retention and new commercial development, according to the committee. The North Street TIF District in particular has seen assessed values grow from $10 million to $30 million.
Still, committee member Peter Chase said the town’s use of generated funds has been far less aggressive than it should have been, and that it has resulted in a substantial TIF fund balance.
“By capturing those costs, it reduces your town’s valuation and the state utilizes that total town valuation when it determines what it is doing for county taxes, school subsidies as well as state revenue sharing,” Chase said. “That’s why it is so important.”
The committee recommends various changes in TIF expenditures, an acreage reduction in several TIF districts to allow for the creation of future districts, and modifying allowed use categories for the downtown district to better utilize it for infrastructure improvement.
“The committee members believe these changes will result in the TIF program better serving the taxpayer and ensure a continuous path of economic growth,” Chase said.
The TIF review committee members include councilors James Peters and Chris Robinson, town manager Jeremy Smith, town assessor Teresa Duff, Peter Chase and Doug Hazlett from the Southern Aroostook Development Corp., as well as two public at large members Jim Brown and Cameron Clark.
The town’s Director of Community Development Nancy Ketch, SADC Executive Director Johanna Johnston and Councilor Jon McLaughlin were added to the committee.
With the recommended modifications, the TIF districts will provide funds for crucial public safety and infrastructure needs, encourage new business expansion, ensure that the downtown remains competitive against newer retail areas, provide funding for critical bond payments and shelter additional valuation gains with the district, according to the TIF Committee
Additionally, the districts will increase state revenue sharing, reduce the impact of county taxes and reduce the town’s share of school costs, Chase said.
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