An explanation of TIFs

2010-03-03 / Op-Ed

By Sandra Scribner

In response to the Commentary in the Feb. 24 Irregular (“Who’s ‘flourishing’?”), I would like to offer an explanation as to why some may not be as enthused as others regarding TIFs.

Maine Revenue Services each year assigns a State Valuation to every municipality in Maine. In our school system, each member town pays for its share of the school costs based mainly on its percentage of the total State Valuation. Say the total valuation of the five member towns adds up to $500 million. If the State Valuation of your town is $166 million, divide your town’s valuation by the total valuation of the five towns and your share of the school budget is 33 percent. ($166 million divided by $500 million is 33 percent).

Eustis’ percentage of the total is the highest because Eustis is the highest valued town among the five.

Now, if another town were to add $40 million to its value, then that town’s percentage of the total would increase and all the other town’s percentages would decrease. Eustis would no longer be the highest valued town, and that would be good for us.

BUT, if all or a portion of that new $40 million of added valuation is put in a TIF, then that portion/ amount is “sheltered” or not added to the State valuation for that town, as far as its share of county tax and school costs is concerned.

It may be a very good deal for that town, but it means the other towns in the district are forced to pay more than they should have to. And taxes go up or expenditures have to be cut.

Now another way to look at it is that almost every taxpayer in Maine whose town is a member of a school district pays about 65 percent of their own taxes to the school, maybe 25 percent goes toward municipal operations and about 10 percent goes to county taxes.

But with some TIFs, instead of 65 percent of the new tax money going to help support education, it is “sheltered” in an in an economic development fund. So although their individual tax bills may not go down, much more of the new tax money stays in their town to be used for economic development instead of being distributed to the education system.

But is that fair to the other towns and to all of the students, their own included?

Sandra S. Scribner is a resident of and the assessor for the Town of Eustis.

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