Wednesday, August 8, 2012

Portland, Maine, To Study TIF Policy

An alert reader of this blog sent me a link to a Portland, ME, newspaper article regarding that City's venture into studying its policies on TIFs.  Thank you for that.

I can't say if our City's Study Commission had any role in Portland's decision to move in the same direction, or if TIF policies are finally pushing enough on common sense that cities are deciding reviews are necessary so elected officials know what is going on and how they should move forward.

For perspective on the numbers involved in Portland's TIFs, a little comparison with Indy might be in order.  Portland, like most cities, is not the entire county.  It covers 52.6 square miles, while Indy stretches to 372 square miles.  Portland also has a much smaller population - 66,194 vs Indy's 829,718 by the 2010 census.

The headline to Randy Billings' article in the Portland Press Herald kind of says it all:

Time to rein in tax breaks for Portland developers?

Lacking a framework for how to use tax increment financing fairly and wisely has led to something of a free-for-all. Now, some city officials say it's time to set limits.

Portland's TIFs appear to be different from ours in a couple of ways (all gleaned from the article, so do not take this as comprehensive research on my part).  First, they include tax breaks for 30 years for the project property- like a very long term abatement rolled into a TIF.  Second, the developer is on the hook for the tax break, instead of the city, if a project "went belly-up".
"When we approve TIFs absent a policy context and the rationale is little more than cheerleading, then we're sending the message: You get a tax break, you get a tax break -- everybody gets a tax break," said Councilor Kevin Donoghue.
Sounds familiar.

The Portland TIF process also appears to be different than ours, as there are goals associated with each project, but no clawbacks if those goals aren't met:
Each TIF agreement is unique, and spells out why that particular TIF is needed, the public benefit, and usually includes the projected number of jobs created.

But those figures are not firm commitments for which the developers are held accountable.

"There is a tendency to overpromise," said Charles Colgan, a professor of pubic policy at USM's Muskie School, who believes TIFs are a valuable tool for towns to stimulate economic development.
Like Indy, Portland has seen successful TIFs and unsuccessful ones.  So, like here, there is hope that forethought into which ought to be created and which avoided would result in better use of taxpayer funds.

While some of the particulars are different, the pursuit of a City Council to understand what it is implementing and what policy is actually in the best interest of their City, is to be applauded.

1 comment:

Anonymous said...

bet they're looking at it in Bogata too, lol