BENNINGTON — A House bill allowing the creation of another tax increment financing district would apply only to Bennington, but other bills that could add additional communities to the list also are under consideration.
H.215 was introduced by Bennington Reps. Mary Morrissey, a Republican, and Democrat Timothy Corcoran II, and others from the county delegation. It would authorize the Vermont Economic Progress Council to approve a TIF district for Bennington and would take effect upon passage.
TIF districts allow a municipality to borrow for public infrastructure improvements meant to assist and spur private development and use a portion of the additional property tax revenue from the development to pay off the bond, rather than sending that money to the state.
There are 11 TIF districts in the state, all established before the program was capped three years ago.
The focus of such a district in Bennington would be the area of the Four Corners downtown intersection, where a major redevelopment project is proposed around the former Putnam Hotel building.
The Bennington Redevelopment Group LLC, which is headed by a group of community leaders from local institutions, has an option to purchase several downtown buildings and proposes a multifaceted project in the $50 million range.
Public investment in street or parking improvements has been mentioned as work the town could finance within a TIF district.
H.215 is before the House Ways and Means Committee, which, according to Rep. Cynthia Browning, D-Arlington, a committee member, could become a key passageway for the legislation.
Browning said that in the past the Senate has been more supportive of allowing new districts, but “the problem has been in the House.”
“I actually don’t support the idea of a TIF,” she said. “I don’t think that is the way to do development.”
Her concerns, she said, include that it can be argued a TIF supports private development that would have taken place without public investment, and that the additional property tax revenue generated and used to pay off the municipal bonds would otherwise go to the education fund.
“From my criteria, this isn’t a wise use of public dollars,” Browning said.
Proponents argue that TIF financing specifically targets the kind of public investment that is not likely to be undertaken by a community without a new source of revenue, and private development that would not likely be proposed otherwise.
They also note that all of the TIF districts in place today are north of Route 4, arguing that communities in central and southern Vermont should have the same opportunity.
Bennington and several other communities agreed in January to jointly hire the firm White & Burke Real Estate Investment Advisors Inc., of Burlington, to lobby on their behalf to have the cap on TIF districts lifted. The communities showing an interest in joining the consortium included Rutland, Springfield, Newport, Montpelier, St. Johnsbury and Brattleboro.
According to Bennington Assistant Town Manager Daniel Monks, other bills currently before the Legislature refer at least in part to the TIF cap. Those include efforts to stimulate affordable housing.
David White, of White & Burke Real Estate Investment Advisors, said Thursday that two bills in the works include the removal of the prohibition on new TIF districts. “The first is H.181, which is a broad housing bill of which elimination of the TIF cap is one part,” he said.
“The second bill,” White said by email, “has not yet been formally introduced. It is a committee bill (that does not yet have a bill number) being drafted by the Senate Committee on Economic Development, Housing and General Affairs. I expect them to vote it out of committee (perhaps as soon as tomorrow, but almost certainly no later than next week), and then it will likely go to the Senate Finance Committee as its next step.”
Bennington Selectboard member Michael Keane is on the appointed Vermont Economic Progress Council, which helps oversee the TIF program. Keane said he understands that the bill that names Bennington alone is in part “a placeholder” and that other bills or amendments are being considered.
He added that, taken together, the communities jointly advocating to lift the TIF cap “could have a lot of clout” in Montpelier, considering the number of legislators involved.
Morrissey said, however, that “it could be a positive, or it could be a negative” if multiple communities seek clearance to join the TIF program at the same time. It is unclear, she said, whether one town or several would have a better chance of winning legislative approval.
“Our goal is to have an open discussion and get the cap taken off,” she said, adding that proponents “have to make sure any proposal going forward is a very solid proposal.”
The Vermont Mayors Coalition, with eight members, has listed lifting the TIF cap as one of its goals for the legislative session.
Vermont has had a TIF program since 1985. TIF financing programs exist in various formats in states across the country.
