BATH
A workshop sponsored by a group called Bath Citizens for Responsible TIF Action drew a crowd of about 70 people on Wednesday evening.
The forum was billed as an addition to public hearings on the Bath Iron Works tax-increment financing proposal that are taking place in City Council meetings. The final public hearing will be Wednesday, Nov. 20 at 6 p.m. at City Hall.
A panel of three people who have had some experience with TIFs and the TIF process answered a set series of questions posed by moderator Howard Waxman. Waxman is a local author and Bath taxpayer.
The panelists were Orlando Delogu, University of Maine law professor emeritus, Joel Johnson, an economist for the Maine Center for Economic Policy and a member of the forecasting committee for the state of Maine, and Brunswick Town Councilor Benet Pols.
Many of the questions were general, encouraging the panel to explain what a TIF is and how it is used in economic development. Other questions dealt with issues that have not yet come up in City Council workshops or hearings, such as whether BIW would be able to pay its full tax share at the end of the TIF period, or whether they were likely to return to the City for additional tax breaks.
“You don’t know,” said Joel Johnson. “You don’t know because BIW isn’t being asked for some basic information about its financial ability to pay its taxes.” Johnson said that BIW should have to prove it needs the money that the city is giving back to the company before a TIF deal is struck. “When Maine had a Circuit Breaker program, getting tax relief was based
on a taxpayer’s income and the relative cost of their rent or property
tax,” he said. “BIW is not asked to demonstrate a need for tax relief
in these TIFs. Your elected officials should be asking for more
transparency and accountability from the company.”
Transparency and accountability would be a theme that would be repeated through the evening. Johnson also advocated clawbacks. In the 1997 TIF, there were some particular clawbacks that brought some additional revenue to the city.
Another question wondered whether other Bath taxpayers are picking up a greater share of the tax burden because of the TIF agreements.
Both Delogu and Johnson said that city taxpayers weren’t necessarily picking up a greater share of the existing tax burden since the TIF by definition is taxation from new value. However, both were clear that the pie for public dollars was shrinking, and the use of that pie had to be weighed carefully.
“It’s a case of beggaring your neighbors,” Johnson said. “While Bath isn’t losing money on the TIF per se, other towns that don’t have a large corporation in their community are losing money on the deal.” For instance, Bath taxpayers are getting some of the town’s needs met by the sheltered tax revenue, and because of the tax shelter, it gets more money from the state for things like school funding. But taking Bath’s true valuation out of the mix means there is less pie for everyone else.
Benet Pols said that Brunswick is currently grappling with that reality. A recently concluded TIF caused the town’s valuation to rise, and school funding dropped dramatically.
Pols said that he has voted for TIFs, and against them. “Basically, if you are giving away more than 45 percent, you’re giving away too much,” he said. The 1997 TIF gave away 100 percent of new real property taxation, and 50 percent of most new business equipment tax. The proposed TIF is a more straightforward 50-50 split.
Delogu said that TIFs do not work to increase employment or maintain employment. “Essentially, they create a race to the bottom for all the communities involved,” he said, referring to the BIW/Ingalls Shipyard competition.
Among city councilors who attended for part or all of the workshop were David Sinclair, Steve Brackett, Meadow Merrill, and Mari Eosco. City Manager William Giroux also attended, as did state Reps. Jennifer DeChant and Rep. Peter Kent.
Comments are not available on this story.
Send questions/comments to the editors.
