The Farmington property tax rate for this year has been set at $17.31 per $1,000 of valuation, an increase of slightly less than 10 percent from last year’s rate of $15.75 per $1,000.

“Unfortunately, we all knew this year was going to be a drastic change,” said Board of Selectmen Chairman Ryan Morgan prior to the vote Tuesday night to set the property tax rate.

Morgan and Town Manager Richard Davis said school budget increases and reduced revenue from the state were largely responsible for the increase.

“If we were left to our own devices, I think we could do a much better job of managing our own budget,” Davis said.

Selectmen said for next year they will work on a list of priorities for use of money from the newly created downtown tax increment financing district, which allows the town to “shelter” some of the property tax revenue from the district and apply the funds to economic development projects.

A provison of the law creating Tax Increment Financing, or TIF, districts allows tax revenue from the property to be sheltered from state requirements for local school funding. As a result, in two years the town could reduce the amount of money it commits to the school district and increase its share of municipal revenue sharing.

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The board voted to shelter 28 percent of the income from the TIF district by earmarking that money for economic development.

The minimum property tax rate would have been $17.07 based on spending approved by voters at the annual Town Meeting. The additional increase in the tax rate is the result of the decision earmarking some TIF revenue for economic development.

Property values represented by the sheltered revenue cannot be considered by the state in calculating the town’s share of county taxes or its entitlement to state financial aid for education and revenue sharing. The result is the town faces lower county taxes and can receive more state assistance.

Morgan said the tax rate calculation chosen by the board represents a compromise, since it shelters some money but not the entire TIF proceeds. Sheltering more money would mean a greater increase in property taxes, while the effect of the sheltering works its way into future state aid and county tax calculations.

“It also establishes the TIF district in a way that voters have approved, with putting some money in (the account) but not increasing the taxes too much,” Morgan said.

Selectman Stephan Bunker said there is no specific plan for using TIF money, and he would like to have one before sheltering more tax money from the district.

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Selectmen Josh Bell agreed and suggested one project the board could consider is expanded downtown sidewalks.

Last year, selectmen approved a downtown development plan that calls for a number of infrastructure improvements, including more sidewalks, a parking structure and a Sandy River footbridge connecting downtown with West Farmington. The plan recommended a downtown TIF district as a way to fund the improvements.

Davis said the town could create a committee of selectmen and residents that could make a list of priorities for TIF-funded projects.

Property tax rates are based on school, county and municipal taxes. Farmington property taxes are due Nov. 1.

Davis said the town has about a 92 percent collection rate by the end of the year.

Kaitlin Schroeder — 861-9252

kschroeder@centralmaine.com


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