2014-09-10 / Front Page

Kingfield TIF explained

By Dee Menear Irregular Staff Writer

KINGFIELD — Understanding Tax Increment Financing, or TIF can be overwhelming to anyone who is not familiar with how it works but it does not have to be. A TIF, such as the one the Town of Kingfield receives from Nestlé Waters, is an economic tool used to fund local community projects. The idea is that these projects will attract new investments to the community.

When Nestlé Waters built its Poland Spring Bottling Plant in Kingfield in 2008, the town entered into a TIF agreement with the company. Under this agreement, the value of the plant is considered sheltered, meaning the value does not result in increased tax revenues. Without a TIF, those tax revenues would go into the General Fund thus resulting in a reduction in State revenue sharing and educational funding, and an increase in county taxes. Simply put, TIF revenues are not counted for or against the town’s taxable valuation.

Selectmen committed 2014-2015 taxes for the Town of Kingfield Aug. 11. Those taxes reflected $367,585 in TIF monies received from Nestlé Waters. Nestlé gets 40 percent of that figure back. There are restrictions as to what Poland Spring can do with the money and it has to be spent at the Kingfield plant.

The town of Kingfield spends the remaining 60 percent on approved projects. During the June, 2014 Town Meeting voters approved spending $147,100 on things such as the Kingfield Recreation Department, Kingfield POPS, Kingfield Festival Days, fire and highway equipment and Reserve Funds for Village Enhancement. The remainder of Kingfield’s share is used to make bond and property payments.

When tax bills are generated, they have to, by law, show TIF revenue even though it is not paid for by taxpayers. It is not calculated in deciding the mil rate either. Maine taxation law states that towns notify the Secretary of State of the value of all property within a municipality that is subject to taxation except for the value of the TIF. According to Kingfield Administrative Assistant Leanna Targett, the assessed value of a TIF does not count towards the municipality’s value for the purposes of state school aid, revenue sharing and county taxes.

The TIF agreement between the Town of Kingfield and Nestlé Waters is good until 2038.

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