The City Council voted Wednesday to reject a tax increment financing proposal from Bath Iron Works, opting instead to offer the defense contractor a package yielding a smaller cut of new taxes generated by future development at the shipyard.

After a lengthy public hearing, the council voted 7-1 to approve to a TIF that would split new tax revenue stemming from an approved outfitting hall, to be built adjacent to the Ultra Hall, 50-50 for the first 10 years, then 40 percent for BIW for the next five years. After that, Bath would retain 100 percent of the tax revenue from the new building.

BIW had proposed an even, 50-50 split over the full life of the 25-year TIF. Under that plan, BIW stood to get some $250,000 in taxes rebated annually from the city, for a total of about $6.5 million over the life of the TIF. The deal approved Wednesday gives total projected earnings for Bath of $9,014,760 — 71 percent — versus $3,711,960 for BIW — 29 percent.

It’s unknown how BIW will respond to the vote. The company may decide not to proceed with the building of the outfitting hall for any number of reasons, including Wednesday’s vote.

Wide disagreement was apparent among Bath citizens attending a public hearing prior to the vote.

Halcyon Blake, who owns a home and business on School Street, said she did not favor the tax break.

“I hope that you (the City Council) understand how the tax cuts to BIW affect the city,” she said. “I hope that BIW has been transparent with you about their need for this tax cut.”

Carol Huntington, a Bowery Street resident who described herself as on a fixed income and caring for a disabled spouse, said she believes tax breaks such as those offered BIW have caused her property taxes to go up.

“Since 2002, my taxes have gone up from $2,300 per year to $4,000 per year,” she said. 

Some favored the TIF. Bill Lent of York Street mused that, “If I were a company with a 5,000 payroll, I’m not sure I’d consider Bath.”

Several people who worked for BIW also testified in favor of the TIF.

After the public hearing ended, councilors took up the issue.

Councilor Mari Eosco made the motion to amend the TIF amendment agreement from the 50-50 split over 25 years to 50-50 over 10 years, then a split of 40 percent for BIW and 60 percent for Bath for the next five years, followed by 100 percent for the city for the remainder of the TIF.  Councilor Steve Brackett seconded it.

Eosco said the city and the corporation were in a symbiotic relationship. 

“I’ve heard everything people have been saying,” she said. “I take it all to heart. I think we have to find some middle ground.”

Councilor Meadow Merrill said she favored supporting BIW because of all the support she hears about the TIF in her district, which is in the south end of the city. 

Brackett said he believed the compromise TIF agreement was “moving in the right direction” — a sentiment echoed by Councilors David Sinclair, Andy Winglass, Leverett “Tink” Mitchell, Bernard Wyman and Sean Paulhus.  

Councilor Carolyn Lockwood said she supported the TIF and would have liked it to yield more benefits to BIW than the compromise offer.

Sinclair offered two amendments to the TIF.

The first amendment tied payment of the BIW rebate portion to consistent employment at the shipyard. The second would have ended the BIW portion after 10 years. Both failed.

Sinclair was the lone vote against the compromise TIF.

In other business, the budgets for the existing TIF districts for fiscal year 2014 were approved. 

Also approved was the state changes to the minimum and maximum General Assistance values.  The maximum for overall general assistance funding increased slightly, but food assistance, which is tied to the Supplemental Nutrition Assistance Program, otherwise known as food stamps, decreased since the food stamp allotment also decreased this year.

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