Another Vermont community is being accused of short-changing the state education fund. A new report from the state auditor says the City of Winooski is mismanaging its Tax Increment Financing District.
Tax Increment Financing is a system that allows communities to capture some of the tax revenue created by new development to payoff the cost of that development. Winooski is one of a handful of communities currently authorized to use the TIF system. It set up its district to help pay for the huge redevelopment project in the downtown. But Auditor Tom Salmon says Winooski miscalculated the revenue from the TIF district, applying too much of the new tax revenue to paying off debt and underpaying the state education fund by 1.5 million dollars.
Winooski officials dispute the auditor's findings. "Besides a problem for the town taking money out of the tax flow for the TIF, it causes problems for the entire state. It's going to be very difficult for people to apply for bonds if banks know 5-7 years down the road the state can change the rules or change mind on rules and take away money from what was pledged to the bond holders," said Deac Decarreau, Winooski's City Manager.
Winooski is only the latest community flagged for TIF violations. Earlier audits showed Milton short-changed the ed fund by 3.4 million dollars and Burlington owes1.2 million. Both cities have disputed the auditor's findings.
Winooski is only the latest community flagged for TIF violations. Earlier audits showed Milton short-changed the fund by 3.4 million dollars and Burlington owes 1.2 million. Both cities have disputed the auditor's findings.
The auditor's office has no authority to enforce its audits and it doesn't appear any other agency is trying to get any of that money back. The auditor's office concedes that there is a lot of confusion over the program. They are working on recommendations to bring to the legislature to streamline the process. Officials say that's especially important with several more communities slated to begin operating TIF districts.
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