I am sure we have all experienced getting a pay raise or a bonus of some sort at work and by the time the Feds and the State get done taxing that new income there is very little remaining to enjoy. Wouldn’t it be nice if when you did earn extra income you could keep all that was awarded to you without having to give a large portion to the taxing authorities?
This is exactly what one of the benefits of having a (TIF) “Tax Increment Financing” district can do for the town of Scarborough. Every new home and every new business building constructed in town adds to the overall town assessment value that is subject to some type of tax by the State and County. Last year we paid $3.3 million in County tax based on assessed value. The State uses the town valuation amount in the Revenue Sharing calculation. Valuation is also a factor in determining school assistance monies, and with each increase in the town valuation these funds become less. For every dollar of new value not sheltered, 58 cents is lost in reduced revenue sharing and increased cost for county taxes.
A TIF allows all new value added to the original assessed value in a defined area of town (district) to be sheltered from the above taxing authorities, saving the town additional county tax and lessening the risk of reduction in revenue sharing and General Purpose Aid for Education.
An action is before the council in early March to approve sheltering 100 percent of added assessed value in the Downtown TIF District established in 2018. This District consists of 955+ acres that includes the Municipal campus with the Town Hall, Schools, Public Library and the park, Oak Hill area with its small shops, restaurants, coffee shops, churches, banks, offices and the Post Office, 50 acres along Route 1 in a business district that includes churches, medium-sized offices and services as well as 424 acres of The Downs property (a single parcel). Taking this action will keep all new value added since 2018 in this District from being used in the taxing authorities’ calculations. With the Downs business district sold out and the addition of IDEXX and Costco along with the new housing development in the coming years, the Town’s value will increase by more than $300 million by 2028. Sheltering this new value will save large amounts of County tax dollars alone and limit the impact to those other state and education revenue sharing items. If the council action is approved, the change in capture/shelter percentage will be reviewed by the State of Maine for approval.
Information on this ‘Tax Shift’ and other benefits of using a (TIF) “Tax Increment Financing” can be found on the Town website Town of Scarborough: Projects in the TIF District project. Here you can find a lot of useful information on the current Scarborough TIF Districts including location maps and the list of projects that can be funded by TIF revenues.
We will discuss this topic further and answer your questions in a new feature we’re calling “Councilor Corner Live”. This virtual discussion will be hosted by two councilors and centers around a specific topic. Our first Councilor Corner Live will be held on Thursday, March 31 at 5 p.m. to discuss TIFs & Managing Town Growth. Community engagement is a critical component of navigating Town issues, and we value your input. Please join us to ask questions, share feedback, and hear from your councilors. Program details and links to participate will be made available at scarboroughmaine.org prior to the program.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Scarborough Town Council.
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