FARMINGTON — A Maine agency believes that Franklin County commissioners should let an existing 2008 tax-increment financing agreement expire naturally, or at the very least negotiate a more modest amendment.
Maine Department of Administrative and Financial Services has raised concerns about a proposed amendment to the TIF the county has with TransCanada Wind Development. The tax-incentive package is connected to the 44-turbine wind energy facility TransCanada built on Kibby Ridge in Kibby and Skinner townships near the Canadian border.
The current TIF agreement shields more than $120 million in new property value from the assessment of county taxes, according to a news release from David Heidrich Jr., director of communications for the Administrative and Financial Services Department.
The agency is responsible for collecting taxes for the unorganized territory in the state through Maine Revenue Services.
“The county commissioners and their consultants have failed to demonstrate a compelling need to change the terms of this TIF or to justify the additional giveaway of taxpayer dollars to TransCanada,” Heidrich wrote. “With construction of the Kibby wind farm long since complete, there is no conceivable economic benefit to the county or (the unorganized territory) to provide TransCanada with more money than originally negotiated.”
If county commissioners allowed the full value of the TransCanada wind project to contribute to Franklin County’s property tax base, the property tax burden of taxpayers in the unorganized territory and every municipality in the county would have been reduced, according to Heidrich.
“Instead, the approved TIF shifted the burden of the county tax assessment to other towns, resulting in increased property taxes throughout the county,” he wrote.
Under the proposed amendment, the TIF would allow 100 percent of the new tax revenue from the Kibby facility to be collected instead of 75 percent the first 10 years, and 50 percent the last 10 years. The remaining tax dollars are sent to the state of Maine. Of the 100 percent to be collected, 60 percent would go to TransCanada and 40 percent to Franklin County.
The amendment also adds 10 years to the TIF, which would dissolve in March 2039 instead of 2029.
Of the 75 percent of tax revenue currently captured, TransCanada gets back 60 percent and the county retains 40 percent.
Under the amendment, in years 2029 through 2038, all TIF revenue would go to the county.
The county is capped at collecting $4 million in TIF revenue and the company is capped at $8.8 million.
As of Monday, the county had collected $3.43 million in TIF revenue and had spent $750,000, according to county Finance Manager Vickie Braley.
The TIF funds are required to be used for economic development and to benefit the unorganized territory.
Commissioners “would be wise to allow this TIF to expire naturally, at the very least, they should send their consultants back to the drawing board with directions to develop a more modest amendment that delivers a better deal for the towns of Franklin County, its property taxpayers, and the residents of the UT,” according to Heidrich.
Without the TIF, Maine Revenue Services estimated a house in Madrid Township valued at $65,000, after factoring in the Homestead Exemption, would see a tax bill decreased by $79.30 to make it $424.45.
Collectively, Franklin County municipalities would have seen a $169,543 reduction in their county assessment, according to the release.
Maine Revenue Services estimates that in two years, when the TIF agreement reaches 10 years, the town of Jay will have paid an additional $350,000 in county taxes than would have otherwise been required. By year 30, the TIF will have cost Jay at least $1 million, Heidrich wrote.
Franklin County commissioners will hold a public hearing on a proposed amendment to a tax-increment financing agreement with TransCanada at 5:30 p.m. today in the Superior Court room at the county courthouse.
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