With the population expected to expand 30% between 2010 and 2030, Charlie Hancock, chairman of the Montgomery select board, is curious to learn the outcome of the next U.S. Census. He knows he’s seen a lot of growth in town, though nobody knows how much.
But for Hancock, one thing is certain: if residents want Montgomery to keep growing, they’re going to have to find a way to pay for a new wastewater treatment system. The lack of capacity now has limited the growth of restaurants and stalled business and residential development in the town of 1,200, said Hancock.
“Without the wastewater capacity, we almost have a ceiling on the growth we can see in the community,” he said.
Hancock is actively supporting a project-based tax increment financing program proposed by the Scott administration. The program, which would need to be authorized under H.642, is now before the House Commerce and Economic Development Committee. It would make tax increment financing or TIF, now used for large projects like parking garages, simpler and easier to implement for small infrastructure projects in rural communities.
Under tax increment financing, voters authorize bonds to pay for public infrastructure improvements within a designated district, with the idea of prompting private investment that will raise overall property values in the district over 20 years. The TIF district uses the taxes generated by the incremental increase in the grand list to pay for the bond, with at least 30% of the increased value sent to the statewide education fund.
The TIF program is administered by the Vermont Economic Progress Council, or VEPC, which must approve projects proposed by municipalities. Only six at a time are allowed under statute.
Megan Sullivan, the director of VEPC, said the panel has been hearing from municipal leaders who say the existing TIF program is too large for their needs, and they can’t meet the project or location criteria that are part of the extensive application process.
“Our larger regional hubs have the staff that can really take that on, but when it’s a smaller community with maybe one full-time staff member, and a part-time staff member, that becomes too big of a reach,” said Sullivan. The smaller program – developed by the Agency of Commerce and Community Development, under which VEPC is located – would make TIF available to Vermont’s rural areas, said Sullivan.
“Looking at the district-based program, creating that rural equity – this looked like it could be a really good way to achieve that,” she said.
State Auditor Doug Hoffer, a critic of the state’s existing TIF program, has pointed out that the rural project-based TIF proposal does not call for an independent audit by his office. It leaves oversight to VEPC.
“As we know from experience, there are risks in asking state entities to both promote and regulate,” said Hoffer. For a period of time, EB-5 projects, including those in the Northeast Kingdom the government said were fraudulent, were promoted and regulated by the Vermont Agency of Commerce. Now, the Department of Financial Regulation oversees regulation.
Hancock, of Montgomery, said the town hasn’t yet calculated how much a new wastewater treatment plant would cost or where it could get state and federal grants and other funding for it. But he estimated that the town of 1,200 would probably have to borrow $1 million or $2 million on top of that funding to complete the project.
“We haven’t crunched all the numbers and seen how much we would need, but the general position is that this is the kind of tool that would help close that kind of gap for our community or communities like ours.”
Another municipality eyeing TIF for a smaller project is West Rutland, which is in the early stages of considering the installation of a roundabout at the intersection of Route 4 and Route 133. The town has been trying to encourage residential or commercial redevelopment on two pieces of land that have been vacant for years.
“Would the redevelopment happen otherwise? I can’t say,” said town manager Mary Ann Goulette. “Right now, we’re just doing feasibility studies to see what the dollar figure is for the roundabout, and we’re talking with housing agencies to try to make that redevelopment happen.”
The state’s existing TIF program is also under review in the Legislature. The Senate Finance Committee is making some changes to details that the auditor’s office highlighted last summer in a report about a TIF projects in St. Albans.
The committee will probably approve those changes this week, said Sen. Ann Cummings, chairman of the Finance Committee.
“We wanted to just straighten out and make clear what the law was,” said Cummings, D-Washington. “We don’t want to get into these kinds of disagreements again. Our obligation is to write a law that is clear.”
