Saturday, March 8, 2014
CHELSEA — Town officials on Wednesday plan to consider whether to form a tax-increment financing district in order to use the new value from a natural gas pipeline for other capital or infrastructure improvements.
The Board of Selectmen is scheduled to meet at 6:30 p.m. at Chelsea Elementary School to discuss the idea, along with issues involving next year’s budget.
Tax-increment financing, or TIFs, allow municipalities to freeze the value of properties for taxing purposes and use the tax revenue that would have been earned from future development for specified economic development activities.
Another benefit of using TIFs is the captured value from new developments, such as from the natural gas pipeline, is sheltered from the town’s valuation. This means it won’t increase the amount the town owes to a school district or county because the development in the TIF district won’t increase the town’s overall valuation.
Sometimes credit enhancement agreements with businesses in the TIF district will give back a percentage of the new revenue to those businesses to help pay for development costs. Town Manager Scott Tilton said that isn’t being considered right now, and the company building the pipeline, Summit Natural Gas of Maine, isn’t requesting a tax break.
Tilton said the value from the new pipeline could assess at up to $6 million.
If the town decides to create a TIF district for the pipeline, it would need to hire a consultant or lawyer and submit the application to the state for approval, Tilton said.
The selectmen also will discuss next year’s town budget, Tilton said.
A legislative task forced charged with finding $40 million in tax changes to reduce a cut to municipal revenue sharing failed to come to a consensus. Tilton said this increases the possibility of further cuts to state funding to municipalities. He’ll be asking the selectmen what types of funding requests they’ll support next year to get a start on the budget process.
The board also will discuss:
• finalizing and adopting 2014 town goals.
• the sale of the town’s 1978 fire tanker.Paul Koenig — 207-621-5663 firstname.lastname@example.org Twitter: @paul_koenig