BURLINGTON, Maine — Residents will be eligible for $300,000 in scholarships over 30 years or as much as $10,000 in funding annually thanks to a tax break voters agreed to give a Massachusetts wind farm developer, officials said Monday.
Residents voted 36-10 during all-day voting Saturday to approve a tax increment financing deal the Board of Selectmen negotiated with First Wind of Massachusetts for the town portion of the company’s Rollins Mountain project. First Wind plans to build 40 1½-megawatt turbines along the Rollins Mountain ridgelines that run through Burlington, Lee, Lincoln and Winn.
Selectwoman Beth Turner said she was glad that the TIF passed. Given that the project otherwise would effectively double the size of the town’s tax burden, thereby cutting education subsidies the town receives and increasing the money it would owe the state, the TIF should save taxpayers some money, she noted.
“By sheltering the project, we are — based on the best estimates — saving at least $7,000 in taxes a year annually over 30 years,” Turner said Monday. “We are also going to be able to do some projects that the town had slated that would have come out of our special revenue funds or out of taxation.”
John Lamontagne, director of corporate communications for First Wind, said Burlington’s was the last TIF agreement the company had hoped to secure.
“We’re excited to continue our partnership with the citizens of Burlington and are looking forward to bringing real economic development opportunities to the town and the region,” he said. “Lincoln, Lee, Winn, Chester and now Burlington have all approved the TIF partnerships between First Wind and the community.”
Tax increment financing is among the state’s leading tools for aiding economic development. When a town sees an increase in valuation created by an investment such as First Wind’s, it also may experience a reduction in its share of state revenues and an increase in taxes it pays.
A TIF allows a town to “shelter” the new valuation from the calculations of state revenue sharing, education subsidy and county tax assessment; in effect, creating more money for the town. With a TIF, however, the money that a town gains must be invested in community economic development projects — such as industrial parks, infrastructure improvements that aid businesses, and community recreation trails.
Under state laws, municipalities can keep the sheltered value for 30 years with a municipal tax phase-in over the last four years so that taxpayers only gradually take on that financial burden.
Businesses such as First Wind receive the sheltered-value benefits for 20 years.
The Burlington portion of First Wind’s project is valued at $25 million, and the town’s total estimated taxable property is $30 million, Turner said.
Under the proposed 50-50 split between First Wind and the town of the taxable value of First Wind’s estimated $25 million investment, the town will receive $5.4 million in net benefits over 30 years, said John P. Holden, an economic development consultant with Eaton Peabody Consulting Group LLC, which advised the board on the TIF.
Without it, the town would have had an estimated net loss in taxes over 30 years of $188,000 as part of the tax shift caused by lost state subsidies, Holden said.
The board will meet at 5 p.m. today at the Grange Hall to discuss the vote and the TIF agreement, Turner said.
Besides the scholarship, selectmen hope to put the TIF proceeds toward several capital projects, including a new town garage, new sand shed, or a portion of the costs of buying salt and sand for winter road maintenance, Turner said.
No projects will be undertaken without voter approval, she said.