Backed by legislators, mayors and business leaders, Gov. Peter Shumlin used a makeshift podium in downtown Winooski to call for changes to tax increment financing. The TIF process allows approved communities to use property tax dollars to fund new development in blighted areas. New development generates more tax dollars, repaying the debt and providing an additional return. The governor says it works.
"The downtown rebirth of Vermont is one of the great success stories of our state," said Shumlin, D-Vermont.
Six communities are currently approved for TIF. But a report compiled by former State Auditor Tom Salmon last year indicates Winooski, Burlington, Milton and Newport accidentally miscalculated revenue and owe the state a combined $6 million.
"Today we're calling on the Legislature to work with us to strengthen the future of our downtowns," Shumlin said.
Shumlin says the TIF law needs to be clarified, and an enforcement protocol developed. He says the debts may not even be real, and the slate should be wiped clean. Bills up for debate in the Legislature propose to do just that.
"If we were to try to get some of the lost money back for the state education fund, it would cost us more in litigation, I believe, than the money we actually might recover," said Rep. James Condon, D-Colchester.
Condon is on the House Ways and Means Committee, likely the biggest obstacle to passage for the proposals supported by the governor. He agrees the law does need to be simplified and enforcement procedures developed.
"There are some who believe-- and I'm not sure they're wrong-- that instead of TIFs, in the future, why don't we just have direct grant programs," Condon said.
He says that might allow small communities to qualify for development aid. Ultimately, he says TIFs are a net positive for the state if new projects occur only because of the investment.
Shumlin also called for allowing a seventh TIF district to spur development in South Burlington.
Tuesday, March 11 2014 11:49 AM EDT2014-03-11 15:49:17 GMT
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