Lincoln leaders to examine property tax decrease proposal on Monday

Posted May 03, 2012, at 6:46 p.m.

LINCOLN, Maine — Tax increment financing revenues from the First Wind industrial wind site and Lincoln Paper and Tissue LLC will reduce the property tax rate next year while the town’s proposed budget increases, officials said Thursday.

The budget proposed for the 2012-13 fiscal year by former Town Manager Lisa Goodwin and interim Town Manager William Lawrence seeks $5.11 million for town government, an increase of about $44,557 over the 2011-12 budget, which lapses on June 30.

But the property tax rate would decline from 19.86 mills to 19.72 mills under the proposed budget because town officials propose using $567,248 in TIF revenues generated by the Rollins Mountain wind site and LP&T to offset a variety of expenses that would otherwise be paid for with tax dollars, officials said.

The budget proposal includes $197,506 in paper mill TIF funds and $369,742 in wind-site TIF money paying for things such as $97,184 in economic development funding and $30,000 of a total $100,350 in salt and calcium purchases for the Public Works Department’s budget for snow removal, officials said.

“Most of them [budget items funded by TIF money] are not big-ticket items, but across the budget they add up to a substantial amount of money,” said Ruth Birtz, the town’s economic development coordinator.

The Town Council will hold a budget workshop at 6 p.m. Monday at the town office to discuss the budget proposal. If councilors do not review the entire budget, a second workshop will be held on May 21, Town Clerk Shelly Crosby said.

The lowered tax rate means that an owner of a $100,000 property would pay $1,972 in taxes next year compared to $1,986 now.

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, it also experiences a reduction in its share of state revenues and an increase in county taxes. 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. TIF agreements usually run 20 years.

With a TIF, however, the money that a town gains must be invested in community economic development projects, such as industrial parks or infrastructure improvements that aid businesses, or be paid to those whose work includes economic development efforts.

The First Wind TIF funds will pay portions of the salaries of the town manager, treasurer, an assistant assessor in the planning office, for two part-time clerks handling a cemetery mapping project, and a portion of the community events coordinator’s position. Those position funds total $122,883, according to the budget proposal.

Another $7,332 in First Wind TIF money will fund police details and municipal workers’ hours during the town’s annual homecoming celebration, as will another $52,180 for street light maintenance, sand and gravel expenses, storm drain maintenance and improvements to electrical service to Veterans Square, the budget states.

LP&T TIF funds will pay for almost $15,000 in town economic development advertising, for Breakfast With Santa, town holiday tree lighting and $5,500 for props, advertising and supplies at Haunted Hill, the town’s Halloween house offering at Ballard Hill Community Center.

It won’t be possible to tell whether local taxpayers will pay more or less in taxes next year until RSU 67’s budget proposal is made final, Lawrence said. That process is continuing.

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