In support of several mayors and town officials, Governor Peter Shumlin today proposed legislation relating to the state’ s tax increment financing (TIF) districts to ensure communities benefiting from the TIFs have clear rules to follow while ensuring oversight and enforcement, when needed, by the state. The press conference was held outside the Champlain Mill in Winooski, site of a TIF success story.
‘ TIFs have been an important tool for promoting economic growth and opportunity for our historic downtowns and new town centers,’ the Governor said. He said that the rules of the road have not always been clear, leaving both the state and TIF district municipalities with uncertainty and risk. Standing with the Governor to highlight the need for clarification were lawmakers, mayors and officials from cities (Milton, St Albans, Winooski, Burlington, Barre and Newport) that have received TIF approval, as well as business and community leaders.
Asking lawmakers to address this issue this session, the governor outlined a proposal that would provide rulemaking, oversight and enforcement, clarify ambiguities in the current law, and safeguard taxpayer dollars.
‘ No matter what one’ s opinion is on the merits of tax increment financing, the status quo is not good for anyone,’ the governor said.
The second part of the legislation, the governor said, would be an immunity from penalties incurred under the current law and forgiving the approximate $6 million in fines leveled against towns for various violations. Milton, in particular, was targeted in a report conducted by former state Auditor Tom Salmon. Milton disputes the claim. But in any case, Shumlin wants to get rid of past punitive action and move what he considers a vital downtown redevelopment law forward.
TIFs are intended to take an otherwise rundown piece of downtown property, which adds very little to the grand list, and redevelop it as job-creating, tax-paying piece of valuable real estate. The TIF for the most part takes the property off the statewide (school) property tax list for 20 years. Proponents, like the governor and mayors, argue that it is an investment that will return to statewide taxpayers many fold because it will create jobs, and thus income taxes, and generate related corporate and/or sales taxes; after 20 years it will fully return to the statewide property tax.
Mayor Thom Lauzon of Barre, who spoke on behalf of the Vermont Mayors Coalition, said a company like National Life Group would jump at that kind of return on investment.
In addition, the Administration proposed resolving the disagreements created by the reports issued last year by the State Auditor’ s office. Cities and towns identified in that report have disputed its findings, and the state’ s ability to enforce any violations identified in the report is hampered by the lack of a clear enforcement mechanism in the current law. The governor proposed to remedy this going forward by ensuring a clear path for state enforcement of municipality deficiencies in TIF implementation.
Finally, recognizing the unfortunate timing of last year’ s final TIF designation, the governor proposed allowing a seventh TIF district for South Burlington.
Shumlin said the TIFs have provided a mechanism for the state to strengthen the economic vitality of Vermont downtowns like Winooski, which hosted today’ s media event. Other investment has also benefited downtowns, the Governor noted.
‘ We look forward to a further conversation with the Legislature, and our partners in local government, to ensure our existing TIFs provide infrastructure, encourage redevelopment and the creation of jobs, but also operate transparently and in the best interest of taxpayers going.
Peter Owens, Director of Community and Economic Development in Burlington, said the Waterfront TIF district, which started in 1996, has gone from a value of $40 million to $120 million today.
Burlington Mayor Miro Weinberger, who was out of town, sent this statement: ‘ Forty-nine states, DC, and thousands of American cities have TIF districts because they work ‘ they create jobs, grow the property tax base, and lead to important housing opportunities. I appreciate Governor Shumlin’ s efforts today to clarify, simplify, and improve Vermont’ s TIF laws, recognizing their critical link to successful state-wide economic development.’
Winooski. 3.6.2013