Gov. Peter Shumlin said today he would ask lawmakers to allow both Barre and South Burlington to qualify for the Tax Increment Financing (TIF) program.
Legislative action will be necessary because years ago a statutory cap of six TIF districts was enacted under new TIF rules enacted in 2006. Five communities are currently included in the TIF program. Both Barre and South Burlington submitted applications for inclusion in the program on the same day last week.
The five that have received TIF approval under the cap are the Milton Town Core, Burlington Downtown, Colchester Severance Corners, Hartford Downtown, and St. Albans Downtown. Other communities were approved for TIF Districts under different statutes, prior to the cap.
"No one could have predicted a photo finish between two communities filing applications for the last TIF district slot," Gov. Shumlin said. "Both communities have already spent money and time getting their applications in and will spend more in the review process. The fair thing to do now is allow both Barre and South Burlington TIF districts to go through the review process by the Vermont Economic Progress Council (VEPC) and qualify, if they meet the approval criteria."
The Governor said he has asked the VEPC Board to begin consideration of both applications, in the order that the process keep moving. He said he will seek early legislative action to increase the number of TIFs that can be approved to seven and emphasized this situation should not get wrapped up in the larger questions about the appropriate number of and accountability for TIF Districts.
"I expect there will broad discussion in the next Legislature about the value of the TIF program and proper accountability, etc., but that should be outside of the narrow question about these two communities who have been playing under the existing rules. I am hopeful for quick legislative approval of my request for Barre and South Burlington," the Governor said.
TIF Districts have been available in Vermont as a public infrastructure financing tool for many years. Vermont's TIF program has undergone many statutory changes through the years, especially since the introduction of a statewide education property tax. Generally, a TIF District is established by a municipality around an area that requires public infrastructure to encourage public and private real property development or redevelopment. The public infrastructure improvements cause real property development and redevelopment to occur, and, for a limited time, a percentage of the incremental municipal and state property tax revenue generated by the new development and redevelopment may be used to pay the infrastructure debt, with the revenue from the original value and the balance of the increment going to the taxing entities (municipality and state). After the twenty-year property tax retention period, 100% of the incremental property taxes generated go to the taxing entities.