Friday, March 7, 2014
MONMOUTH—Voters on Tuesday overwhelmingly approved a tax incentive plan aimed at attracting more business to town.
Residents approved 167 to 49 the Tax Increment Finance plan, which will, in part, lead to improvements in the downtown.
“It’s an investment by the citizens,” said Town Manager Curtis Lunt. “We appreciate their support.”
The tax break will shelter half the tax collections generated by the new Central Maine Power Co. substation on South Monmouth Road.
The substation will add about $22 million to the town’s valuation, generating about $293,000 in additional property taxes each year.
However, an increase in the taxable value of town properties would normally mean Monmouth will receive less money from the state through revenue sharing and for education, and pay more in county taxes and to support schools throughout Regional School Unit 2.
The TIF, which the Economic Development Committee drafted, will shelter about half of the substation’s property value, or about $11 million, from its taxable property valuation.
The maneuver will allow the town to set aside about $146,000 in property taxes that would be earmarked for specific projects, such as downtown improvements to attract additional businesses and giving new businesses additional tax breaks. Spending is limited to projects outlined in the TIF plan approved by voters and the state.
As a tradeoff for creating the TIF and limiting how the money can be spent, the effect on state revenue sharing and education funding, as well as the increased county assessment, will total only about $56,000.
Based on current and state funding formulas, without a TIF the average homeowner would have seen a decrease in property taxes of about $19 for every $100,000 in valuation.
With a TIF, that reduction would drop to about $9 per $100,000 in valuation.
Lunt said the plan must now be approved by the state’s Department of Economic and Community Development. Lunt said he expects the plan to be accepted or require only minor modifications.
He said he was pleased with the voters’ decision.
“It’s an investment by the citizens,” Lunt said. “We appreciate their support.”
Craid Crosby -- 621-5642