📰BIDDEFORD | OPINION | Tax Increment Financing could be great, if Biddeford used it correctly

By: Jason Litalien, Contributing Writer, Independent Candidate Maine Senate 32

Tax Increment Financing (TIF) is a program from the State that allows us to retain additional tax money received from that district without having to share it with the County or the State. When structured properly, TIFs can be a great tool for redevelopment. Unfortunately, that is where part of the problem begins.

Another part of the problem is the Credit Enhancement Agreement, which is a public subsidy to the developer, and once distributed, the funds are controlled by the developer. We have TIF districts around the city, the most well-known is the Mills. The city has given away millions of dollars in subsidies and at the same time the city has raised taxes over and over.

I am not picking on anyone, and I don’t blame the developer for taking advantage of the city because the city should have more negotiating power, so it is our own fault; however the Riverdam Mill redevelopment illustrates how Biddeford has used TIF districts to make the developers millions and cost the taxpayers more.

According to the Portland Press Herald, the property was generating approximately $19,378 annually in property taxes before redevelopment. The city projected the redevelopment would increase the property value from roughly $1 million to $10 million. This all sounds great because now we can collect taxes on $10 million instead of $1 million. But wait, there’s more…

Under the approved Credit Enhancement Agreement, much of the new tax revenue above the $19,378 base amount is diverted away from unrestricted municipal use for approximately 11 years. That means less money is available to cover the added burden that comes with 71 new apartments, including emergency services, schools, and public works. The rest of the city is left with the bill.

Out of the $19,378, based on FY2019 when the TIF was created, about $1,200 goes to the County for the county budget; about $11,000 goes to the school budget, and that leaves about $7,178 for city services.

So, the people who built the city, bought their modest home, and built a family and life here, end up having their taxes raised to cover the profits for the owners. That part alone is bad enough, but then we add insult to injury because without the Credit Enhancement, more of the additional revenue could have remained available to offset the cost of a new $810,000 fire truck, $390,000 rescue vehicle, and a $100,000 fire brush truck. Those are not arbitrary numbers; they are from the FY25 Capital Recommendations & CIP. The additional revenue from this and other TIF districts might have covered it. And you guessed it, there’s more…

The city bought the property temporarily in order to access federal brownfields funding for asbestos and related cleanup work, with up to $200,000 in federal funds for remediation. Then, the property interests were conveyed back to the developer after the remediation work was completed.

To be fair, we got an ADA easement for the RiverWalk in exchange for $1.9 million, plus the tax increases that we get to pay. We definitely got the short end of that deal. Oh, and you noticed I said that much of the extra revenue went back to the developer, but not all of it. That is because next time we will look at how the city also financed a parking garage for the mills through TIF money and stabilization payments to the operator, meaning taxpayers have to make up the difference if garage revenues fall short. That is money that could have been used on a fire truck or other city priorities. I’m not picking on the fire department either, I am doing the opposite, they need new equipment and that needs to be a priority, but because we can’t seem to properly negotiate a fair deal, we now have to cut services and/or increase taxes on the people outside of the TIF district to get important line items.

This is one property in one TIF district in the city. When you start doing the math on all the TIF districts and all the subsidies, your head will spin at how much money we give away to help developers make millions and you and I are the ones paying for it. We were told over and over that Biddeford was the hottest real estate market and everyone wanted to come here. So why do we need to subsidize developers to do what they do?

The idea of the TIF is great and it can help municipalities develop run down areas, but if we give the benefit of the TIF back to the building owner, then all it does is create a greater tax burden on the people who do not even live in the TIF district or benefit from it. I know people in Biddeford who pay upwards of $10,000 a year in property taxes on private homes, while much of the additional tax revenue generated above the original $19,378 base valuation at Riverdam is diverted back through the Credit Enhancement instead of the rest of us having to pick up the tab.

This is one reason why our taxes keep going up. This is why we need common sense back in government.

---Biddeford's trusted news source;

🗣 Local news For YOU, By YOU 🤝

www.biddefordbuzz.com

About the Author: Jason Litalien is an Independent candidate for Maine Senate District 32. Jason is a Veteran of the UnitedStates Military, and both lives and owns a business in Biddeford, Maine.

According to Litalien's campaign, he is "focused on lowering costs improving education, and supporting responsible growth in Biddeford, Dayton, Hollis, Lyman, and Arundel."

To learn more about Jason Litalien, please visit https://jason4maine.com/.