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Maximizing Municipal Revenue with TIF Financing in Gardiner, Maine

Learn about Tax Increment Financing (TIF) benefits in Gardiner, Maine, attracting investments, infrastructure projects, tax shelters, and more. Explore TIF types, project costs, criteria, history, and financial benefits.

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Maximizing Municipal Revenue with TIF Financing in Gardiner, Maine

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  1. Maximizing Revenue Benefits Through Municipal Tax Increment Financing (“TIF”)City of Gardiner, MaineJoan M. Fortin, Esq. Charles Lawton, Ph.D. – Planning Decisions, Inc. February 4, 2009

  2. Legislative Findings • Provide new employment opportunities • Improve and broaden the tax base • Improve the general economy of the state

  3. Program Summary • Allows municipality to “capture” new property tax value • Property taxes on new value are “TIF Revenues” • TIF Revenues can be used to fund a wide variety of authorized project costs

  4. Benefits to Municipality • Attract new investment (i.e., tax $$$) • Examples: City of Lewiston & Town of Lincoln • Significant infrastructure projects • Example: Town of Edgecomb & City of Bangor • Tax Shelter (i.e., the “tax shifts”) • Examples: City of South Portland, City of Bangor & Town of Eliot

  5. Tax Shelter Benefits • TIFs shelter new value from a municipality’s “State Valuation.” • A municipality’s State Valuation effects 4 important areas of municipal finance: • State Education Subsidy, • County Taxes, • State Revenue Sharing Subsidy, and • Local Education Allocation.

  6. Types of Municipal TIFs(under Subchapter 1 of Chapter 206 of Title 30-A) • Traditional Municipal TIF • Can be located anywhere in municipality • Downtown Municipal TIF • Located in the traditional central business district • Must be described in a downtown redevelopment plan • Some statutory limits do not apply

  7. Authorized Project Costs: 30-A M.R.S.A. Sec. 5225 • Project costs “inside” the TIF district • Project costs outside the TIF district, but “directly related to or made necessary by” the TIF district • Costs of economic development, environmental improvements or employment training within the municipality

  8. Ineligible Project Costs • Buildings or facilities used for the general conduct of government or for public recreational purposes • City halls • Jails • Recreation centers • Athletic centers • Swimming Pools

  9. TIF Criteria & Program Limits • 25% of area blighted; need of rehabilitation, redevelopment or conservation (N/A for downtown TIF) • Acreage Cap (N/A for downtown TIF) • Value Cap (N/A for downtown TIF) • Municipal indebtedness ceiling (N/A for downtown TIF) • Term limits

  10. Procedure for Creating a TIF District • Public notice • Public hearing • Vote by legislative body • Designation of TIF District • Development Program for the District • Downtown TIF must also include downtown redevelopment plan • Approval by Commissioner of DECD

  11. Funding Project Costs • Credit enhancement agreements • Municipal bonds • Setting aside TIF revenues

  12. TIF Accounts & Accounting • Development program fund • Project cost account • Development sinking fund account

  13. Gardiner’s TIF History • TIF Policy created in 1999 by Council • Amended 2003 • Downtown TIF (2003) • Libby Hill TIFs • Harper’s (2000) • Pine State (2004) • EJ Prescott (2005) • Associated Grocers TIF (2006)

  14. Tax Shelter Benefits Downtown E.g..

  15. Tax Shelter Benefits Downtown E.g.. $2.2 million TIF revenue $1.3 million from state.

  16. Libby Hill Area Wide TIF District • 22 Lots in Libby Hill Area Wide Business Park • 10 Lots from Phase I of Business Park TIF • 12 New Lots • Dennison Lubricants has already located on Lots 10 & 11 • $1.5 million in new value • Additional $1.5 million development within 5 years • 30-year TIF Term • Streamlines the Incentive Process • Incentive for Future Development

  17. Financial Benefits to City of Gardiner • TIF Revenue to Municipal Project Cost Account • Projected at $26.7 million over 30 years • Tax Shift Benefits • Projected at $19 million over 30 years

  18. Thank you. Joan Fortin, Esq. • jfortin@bernsteinshur.com • (207) 228-7310 Charles Lawton, Ph.D. – Planning Decisions, Inc. • clawton@maine.rr.com • (207) 363-3541

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