MONMOUTH — A proposal by selectmen to spur business creation through a tax incentive plan met with little resistance at Wednesday’s public hearing.
The board’s proposed tax increment financing district garnered a few questions and wide support from about two dozen people who attended the meeting at Cumston Hall.
A townwide vote on the tax proposal is scheduled for Feb. 12.
“I see there is a risk in not doing the TIF,” resident John Hammond said.
The TIF would shelter additional revenue generated by the new Central Maine Power Co. substation on South Monmouth Road. The substation will add about $22 million to the town’s valuation. That means the town will receive about $293,000 more in property taxes each year.
However, the increased property valuation means the town would receive less money from the state through revenue sharing and for education, all while paying more in county taxes and to support schools throughout Regional School Unit 2. Based on calculations using current budget and state funding formulas, the effect would total about $112,000.
The selectmen’s proposal, which the Economic Development Committee drafted, would shelter about half of the substation’s property value, or about $11 million. The maneuver would allow the town to keep about $146,000 in property taxes that would be earmarked for specific projects, such as downtown improvements to attract additional businesses and giving new businesses a tax break. Spending is limited to projects outlined in the TIF plan approved by voters and the state.
If voters approve the TIF next month, selectmen will be able to spend money on projects outlined in the proposal without voter approval, though Town Manager Curtis Lunt said the board would hold public hearings. Spending for land and bonding is subject to voters’ approval.
“The list doesn’t mean the town will necessarily do all these projects,” said attorney Shoshana Cook Mueller, who helped the town develop the proposal. “These are projects the town can choose from.”
As a tradeoff for creating the TIF and limiting how the money can be spent, the state would cut in half the valuation increase created by the substation. That means the effect on state revenue sharing and education funding, as well as the increased county assessment, would total only about $56,000.
Based on current and state funding formulas, without a TIF the average homeowner would see a decrease in property taxes of about $19 for every $100,000 in valuation. With a TIF, that reduction would drop to about $9 per $100,000 in valuation.
Resident Guy Piper, who owns property in the proposed TIF district, wondered whether his land would be subject to greater restriction.
Selectman Harold Jones said the TIF might make Piper’s land more appealing to commercial developers if he decides to sell, and suggested Piper’s Christmas tree business might be eligible for support.
“It could benefit you, depending on what you want to do with the land,” Jones said. “It doesn’t restrict you at all.”
Resident Nancy Smith said she was concerned about construction of a business park, which is included as a potential project. Selectman Timothy McDonald said the town has no plans to build a business park unless a company were ready to move in. He said any land purchase for a business park would need voters’ approval.
“We don’t want to build something and hope somebody will come,” McDonald said. “If somebody approaches us with an opportunity, if we don’t have the language in here, we can’t help them.”
McDonald said Monmouth is uniquely situated among neighboring communities to attract business because of its vacant buildings, public sewer and water and easy access. A tax incentive offered through a TIF would bolster that resume.
“Hopefully this would be just enough to tip the balance in our favor,” he said.
McDonald said the town shouldn’t fail to take advantage of an opportunity to improve its downtown and attract businesses without an additional burden on taxpayers. He said the town is leveraging $32,000 to get $146,000.
“That’s like buying Apple stock at $100 and now it’s $500,” he said. “I think it’s a rare opportunity for us. I don’t think going to come along again.”
Craig Crosby — 621-5642