Dexter officials consider TIF district possibilities
DEXTER — Dexter town officials have been working to retain and attract businesses to the community. One economic development tool available to Maine communities is tax increment financing (TIF) and during a Nov. 14 council meeting Town Manager Trampas King discussed what the community may be able to do.
“The last week or so I have been trying to educate myself on these, I knew about them but now I know more,” King said. “I just want to update you in case something happens we can look into it.”
Per a handout passed out at the meeting, tax increment financing is a flexible financing tool used by municipalities to leverage new property taxes generated by a specific project(s) within a defined geographical district. Town are able to shelter increases in valuation, and any portion of the new taxes may be used to finance public and/or private projects for a defined period of time of up to 30 years and avoid losses due to state and county fiscal formulas.
TIF revenue can fund infrastructure enhancements related to/or required for project development (public or private) and/or project costs. There are statutory requirements and local processes for a TIF district. These can assist in achieving economic development goals of a comprehensive plan or other visions, attract new investment, accomplish significant infrastructure projects and shift tax benefits.
“It seals that area at the price that it is taxed right now,” King said. He said a $500,000 property with a $50,000 tax could have these revenue earmarked as “it allows you to do certain things with it.”
The town manager said tax increment financing “assists you and your economic development goals” by attracting business and/or helping existing establishments expand. “It just shifts the taxes so we get the money instead of the state getting that,” King added.
He said in a TIF the new value of a property is shielded from the town’s valuation, which is used to calculate how much money comes in from the state for the school system and municipal revenue sharing as well as the share of the county tax.
King said 45 cents of every new tax dollar is lost revenue for a community, with these funds going to the state and Penobscot County. “We would receive only 55 percent of that money, this is why towns do this,” he said, mentioning how Dover-Foxcroft set up a TIF district for redevelopment at the former Moosehead Manufacturing property.
“It’s a thing that we can take advantage of and use ourselves instead of giving the money back to the state,” the town manager said. “It’s just going to help us get businesses here,” with interested companies needing to first approach the municipality.
Resident and business owner Frank Spizuoco brought up the possibility of tax breaks for businesses, using an example of a 75 reduction for the first few years and the reduction decreasing after this initial timeframe in exchange for stipulations such as a number of employees hired.
“It could be a good incentive, it’s hard enough to get people here,” he said. “It would not really cost us anything, it’s something you did not have before.”
King said he would set up a presentation for councilors to learn more about tax increment financing.
In other business, King said earlier in the day he spoke at the monthly Dexter Age-Friendly Tea Talk at Gatherings 4 Main Street. He said during the program Dawn Tritch, who owns the home of the gathering space as well as another Main Street building, has purchased the adjacent former cafe space.
“When you get a lot of people in there it gets real noisy,” King said about Gatherings 4 Main Street. He said Tritch intends to have the new building serve as quiet space for those stopping by to read and enjoy some refreshments.
King said he also met with Chris Cabral of Delta Solutions Inc. about a new business possibility in town.
“It’s the manufacturing and processing of hemp and medicinal cannabis,” Cabral, who lives in Exeter and is planning to move to Ripley, said about the operation.
“This is something we need to address for him in a timely manner it it’s possible,” King said. He said the planning board would be looking at Cabral’s proposal and this would likely be an agenda item at next month’s council meeting.