City Council Discusses Tax-Increment Financing Proposal Among Other Topics at Meeting


By Jarod Farn-Guillette

 

Tax-increment financing (TIF) is not a new idea, but one that has grown in popularity in recent years, as cities seek to improve their economies and environments. TIFs work by designating a particular district or area within a municipality, here being the downtown district and DiCenzo industrial properties on North Street,  as a “TIF district”, where according to John Pottle of Eaton Peabody “a TIF only deals with new taxable value, it doesn't dilute [from the] existing tax base...you get 100 cents on the dollar locally compared to the general fund.” The proposed TIF, a public financing tool used to fund redevelopment or revitalization projects, successfully used by cities such as Chicago, works by diverting future gains from property tax increases to subsidize these efforts. Another tool used by TIFs is the creation of debt, in the form of bonds, used for financing the TIF's specific project goals. An important thing to note is that TIFs are project specific and can only be used, with some flexibility, for their purported aims, in Calais the economic resuscitation of the town [1].  Pottle stated TIFs are “a tool for economic revitalization, not the silver bullet.” 

Councilor Sherrard asked the important question, “Does this remove tax dollars from the city?” Which Pottle responded, explaining it only uses new tax dollars and “doesn't remove tax dollars from the city's budget.” As a tool to incentivize development, TIFs are not prescriptive in what types of businesses are included, but the city has the discretion of what is a desirable business to be granted a TIF. While many municipalities successfully employed TIFs, some as near as Gardner [2], others subsidized development when tax payer money failed to meet projections. The still struggling brownfield redevelopment of Atlantic Station in Atlanta is a prime example[3]. An important fact to note in Atlanta's case was the city issued bonds right before the 2008 recession. There was no mention of a bond issuance at tonight's meeting. As Calais' economic situation continues to stall, a TIF may be the right maneuver to put some lift in the city's economic wings. With a life-span of 30 years, the goal is to add $350,000 of new valuation every 5 years, almost met by the new Dollar Tree. Councilor Rogers forwarded a motion to pass the TIF, with unanimous support. The application was sent to Augusta for filing. 

Other important issues on the night's agenda included scheduling a public hearing, March 23rd, for an upcoming disruptive property ordinance aimed at penalizing landlords that fail to deal with disorderly tenants. It will give the city authority to fine properties where landlords have failed to work with the police and city officials in mitigating and remediating complaints associated with noise, violence and disruptive behavior resulting from such renters. With the aim of limiting the “proliferation of properties that disrupt neighborhood tranquility,” Chief Randall inserted “we are not out to put pressure on landlords that are working with us” rather focusing on those concerned more with profit and not community. 

One other important topic that took up a significant amount of discussion and generated input from the audience was bow-hunting in the city. At issue was the futility of issuing an ordinance against hunting in the city as it is not legally enforceable. Councilor Mingo mentioned examples of other cities and towns in Maine enacting similar by-laws that are not defensible in court, due to conflicting higher state laws that permit bow hunting within city boundaries. The city solicitor recommended that the city act as a land-owner posting no-hunting signs, legally enforceable to restrict hunting on city owned property.  Councilor Rogers’ particular points of concern for public safety focused on “specific spots” in the city such as the recreation center and the riverfront walkway. A member of the public questioned why tree-stands are not permitted to be used within city limits, saying it is a safer way to hunt as the arrow's trajectory is downward terminating in the ground. A local hunter in attendance also mentioned state law already prohibits bow hunting within certain distances of schools, public ways and private dwellings and that projectiles may not pass through said areas. Jim Porter invited the local hunters in attendance to work further with  the city, and the discussion ended with all parties seeming to have their needs and concerns met. The topic was sent back to the property and public safety committees for further discussion. 

Other items on the agenda included sewer and water line upgrades for Manning Street, approved with a 20 year financing plan. Council mentioned their displeasure with Sargent Construction’s poor job performance on last year's South Street project. The council also congratulated the middle school cheerleading squad on their upcoming trip to Six-Flags New England for a regional cheering competition. 

1. Baker et al. 2015. Policies on the move: the transatlantic travels of Tax Increment Financing. Anals of Amer. Geographers.  http://dx.doi.org/10.1080/00045608.2015.1113111

2. http://gardinermaine.com/Public_Documents/GardinerME_EcDev/tifpolicy

3. Layton, Dick. 2016 Effects of the Great Recession on Tax-Increment Financing in the United States, Georgia, and Atlanta. Center for State and Local Financing, Georgia State University.  http://cslf.gsu.edu/files/2016/01/Effects-of-Great-Recession-on-Tax-Incr...