"Passadumkeag Wind park' Tax Increment Financing (Bangor, Penobscot: real estate, how much)

[Submariner]

I received a flyer inviting me to a Public Hearing, from the department of auditing for the Unorganized Territory Division. It is addressed to 'Unorganized Territory taxpayers'.

This is to attend a public hearing in Bangor on the "Passadumkeag Wind park' Tax Increment Financing [TIF], development plan for the tax revenues of the Unorganized Territories, by the Penboscot County Commissioners. The public hearing is being held on a 30-year plan for the use of future tax dollars.



As I understand 'TIF'; it is a method to use future property tax increases to subsidize current improvements, where a government grant was given assuming that these wind mills will result in an increase in the market value of surrounding real estate, which will generate higher property tax revenue. So they are assuming that windmills will increase the property taxes of all land within sight of the wind mills.

Increased property taxes will then pay for the construction of these windmills. [I must assume that like all bonds this is done by a bank, charging interest, so the bankers make their profit margin]

Now when I google the "Passadumkeag Wind park' I see a bunch of blogs and sites protesting the windmills, saying that they will ruin property values.

The Kool-aid in the first punch bowl says that wind mills should be built using tax dollars [with the profits going to a bank], their existence will increase property values and therefore property taxes, and the higher taxes can pay for the 'improvement' to the scenery.

The Kool-aid in the second punch bowl says that wind mills hurt tourism and decrease from the market value of the area; and I assume should not be built using a public bond like this.



I feel as if I am looking at a few jigsaw pieces that do not fit together. I must be missing parts of this puzzle.

Obviously our bureaucratics are not expecting taxes in the area to go up enough to pay for the grants that will be used to build the "Passadumkeag Wind park" [plus the interest on that money]. So what am I missing?



btw I am very pleased that someone actually addressed a letter to 'Unorganized Territory taxpayers', and then mailed them out to Maine residents.

Usually when I get notices of things happening, I get them from my in-laws who live out-of-state. It has been our observation that our Unorganized Territory bureaucratics only send stuff to out-of-state land owners, instead of to Maine residents. This is the first time in seven years that residents got a flyer

[Northern Maine Land Man]

FBK says:
"I feel as if I am looking at a few jigsaw pieces that do not fit together. I must be missing parts of this puzzle."

Big important parts.

If a company invests say $40,000,000 in Penobscot County's Unorganized Territories that company pays taxes on that development to the County. State law allows a portion of the tax paid to go to the county without the county losing state aid to roads or education for example. Losing this aid would cause homeowner taxes to go up.

This is prevented with a tax increment financing plan. Those funds going to the county can only be used for specific programs and projects the county would not otherwise have done. These funds benefit the county and do not increase the taxes of other property owners.

Industrial development of any kind increases the total county valuation. It has nothing to do with views. It's just an uptick in the total valuation of county assessments.

A TIF is not a bond.

There are no tax increases to existing county taxpayers.

Public funds will not be used on the project if it is approved. All application fees are paid by the company making the investment in our county.

[Submariner]

Originally Posted by Northern Maine Land Man

... There are no tax increases to existing county taxpayers.

Public funds will not be used on the project if it is approved. All application fees are paid by the company making the investment in our county.

You have said a very similar phrases recently on a different topic.

'No tax money will be spent", "This will be private money", "No taxes are involved": Or something like that, when in fact $300,000 of tax payer money was spent.

Do you see a trend?

[retiredtinbender]

TIF's are murky and complicated. Legal was on top of their game when they drafteed that law. NMLM is right; it not a bond. Not that I understand it but I believe a TIF allows a muni to not count revenue/tax base monitored by state and county as taxes and split it between the muni and org based on a percentage both agree on (and withing the law). I believe it is to help promote business. A lot of towns try to steer clear of it.

[Northern Maine Land Man]

No, $300,000 has not been spent and it is unlikely that it will be spent. Some utility projects came in $300,000 under budget. The money is sitting there and the legislature authorized expending some of it to gather up information from the several prior studies of east/west highways and consolidate it. This project has been needed and studied for half a century now. Summer interns will likely do most of the information gathering and they don't make much money.

TIF, tax increment financing;

Tax: The utility will pay taxes on the value of their property.

Increment: An increment or portion of that tax to the town or county can be used by the town or county for projects that might not otherwise have been done. In return, the state does not cut back on aid to local schools or roads.

Financing: The power generating company ends up with a lower tax rate than they might have paid if the towns and county did not participate in the program. Some towns opt out. They tax the power company at the full rate. The state cuts back on state aid for schools and roads in that town. Each town must carefully balance the loss of state aid against the benefit of TIF funds. In a few cases it is financially beneficial to opt out of a TIF. However, in two years the legislature could change the whole law. It's a gamble. If a town locks into a TIF it's good for 20 or 30 years. Even if the legislature changes the rules, the contract stays in place.

[Submariner]

Originally Posted by Northern Maine Land Man

No, $300,000 has not been spent and it is unlikely that it will be spent. Some utility projects came in $300,000 under budget. The money is sitting there and the legislature authorized expending some of it to gather up information from the several prior studies of east/west highways and consolidate it. This project has been needed and studied for half a century now. Summer interns will likely do most of the information gathering and they don't make much money.

From the previous discussions here, I had thought that the money was already spent.

I see it was signed 4April of this year by our governor.

So your saying that the feasibility study has not been done yet, for this E-W corridor?

[Submariner]

Today I attended the Public Hearing, called by the Penboscot County Commissioners for Unorganized Territory residents, to discuss the "Passadumkeag Wind park' Tax Increment Financing [TIF] project.

I was given a large stack of documents explaining it, and a nice briefing was presented. There is no government grants or bonds in this. It is all done assuming that these wind mills will result in an increase in the market value of that one parcel of land alone, which will increase their taxes.

The Commission is looking at making improvements to recreational trails, and improvements to various roads through-out the Penobscot County UTs.

It was interesting to hear about all of the laws which limit how much windmills can be taxed, and how that revenue must be budgeted separately for the community from within which it is derived. Since this project is being built in a Penobscot County UT; none of the tax revenue can be spent on any of the organized townships within Penobscot County.

I did not count how many people attended the hearing, I would estimate that it was between 40 and 50 people.

The Commissioners made it very clear starting the public comment portion that they wanted to hear first from Penobscot County UT residents.

The first two speakers were each asked where they resided, and they both responded by starting to read prepared statements denouncing the project. Each of them were questioned about their residency, both admitted to being from away, and they were each asked to hold onto their statements, and to wait until after residents spoke.

There were 3 Penobscot County UT residents in attendance, and we each addressed the commission. We each had questions about the project, which were all answered in due form. Each of us thanked the commissioners for inviting us to the hearing and for making improvements to the Penobscot County UTs.

Which left the majority of people attending the hearing to speak afterward, with their concerns as being folks from away.

Overall I would say that it was a very productive hearing.

[Northern Maine Land Man]

Hallelujah! Forest Beekeeper got it directly from the horses mouth:

"There is no government grants or bonds in this."

When you go to the source instead of propaganda from the Luddites you get real facts.