CHELSEA — Residents at a special town meeting Wednesday night approved a tax increment financing district for a natural gas pipeline that will allow the town to set aside new tax revenue for economic development and infrastructure projects.

Nearly all of the 50 residents at the special town meeting in the Chelsea Elementary School gymnasium voted to create the tax increment financing, or TIF, district for the pipeline installed over the last two years.

The estimated $6.9 million value of the 6.5 miles of natural gas pipeline is expected to generate $2.5 million in new tax revenue over the 30-year life of the TIF district. The pipeline, installed by Maine Natural Gas Co. and Summit Natural Gas of Maine, will raise about $118,680 in revenue next year.

Because of the TIF district’s creation, that revenue goes to a fund for specific economic development projects instead of the general fund. The revenue also will be shielded from the valuation of the town by the state, meaning the increase in value from the pipeline won’t affect the amount the town gets in state aid, the amount of taxes the town pays the county or the town’s contribution to the school district.

The TIF won’t affect how much the natural gas companies pay in taxes. While some TIF agreements provide tax rebates to the businesses or developers creating the new value, this one is not designed to do so.

The TIF application the town will file with the state calls for the money to be used for a dozen economic development projects, but the town can amend its uses at another town meeting. The projects include repairing and replacing roads damaged by the pipeline installation, the implementation of an economic development program, the development of recreation trails and covering 50 percent of the cost of a new tanker truck for the Fire Department.


“This would be the first step in creating a pool of money, if you will, to enhance infastructure to entice businesses to come into town,” Selectman Richard Danforth said. “We can’t do that without the TIF money.

Another selectman, Michael Pushard, said whatever the town has done previously to try to attract businesses didn’t work.

“We need to work as a board and set up the future boards of this town with a future that is going to make this town grow and move forward, and that means bringing in business. The way our taxes are going to go down is we bring in new businesses.”

The board members said if the town doesn’t create the TIF, the tax rate would be relatively unaffected because the town would lose about 60 percent of the new tax revenue from the pipeline to less revenue sharing from the state and higher contributions to the school district and the county. The board held a public hearing on the proposal Jan. 14.

“It’s a positive step for the future of the town,” Danforth said.

Paul Koenig — 621-5663

Twitter: @paul_koenig

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