Tax Increment Financing District Legislation Approved
Tax Increment Financing (TIF) Districts have been available in Vermont as a public infrastructure financing tool for many years, but the number of districts has been restricted. Legislation passed this year allows the formation of up to six additional TIF Districts.
A TIF District is established by a municipality around an area that requires public infrastructure to encourage public and private real property development or redevelopment. The property values at the time the District is created are determined and the property taxes generated by that original value continue to go to the taxing entities (municipality and state).
After the municipality creates a TIF District and gets approval by the State to utilize the incremental education property tax revenue for TIF debt, the municipality must get voter approval to incur debt to build public infrastructure. The public infrastructure improvements cause real property development and redevelopment to occur, and, for a limited time, a percentage of the incremental municipal and education property tax revenue generated by the new development and redevelopment may be retained to pay the infrastructure debt, with the revenue from the original value and the balance of the increment going to the taxing entities (municipality and state). After the twenty-year property tax retention period, 100% of the incremental property taxes generated go to the taxing entities.
The Town of Bennington is working to develop a TIF District application to support the Putnam Block Redevelopment project in the downtown. Contact Bill Colvin at the BCRC for more information about TIFs or the Putnam project.