Franklin County commissioners are considering a tax break for a $220 million wind farm project near the Canadian border.
If the deal, known as tax-increment financing, is created for TransCanada’s project atop Kibby Mountain and Kibby Range, the county would be able to keep a sizeable portion of the $1.6 million in tax revenue generated annually by the project for the next 20 years.
The county would use its share for economic development purposes and return the remainder to TransCanada for reinvestment.
Without the TIF, the project would reduce property taxes in unorganized territories, a Maine Revenue Service official said.
, the department that oversees the property tax division for the state’s unorganized territory.
If it is approved, property taxes would remain about the same. Franklin County, however, would be able to shift, or “shelter,” a significant amount of those taxes from the state to use locally.
“It will create property tax inequity,” said David Cota, town manager in Carrabassett Valley, who attended Tuesday’s meeting .
Carrabassett, with a nearly $519,000 county tax bill, and Jay, at $586,000, are the highest valuated communities in Franklin County.
In a letter to the commissioners, Cota said TransCanada’s property taxes without the TIF would reduce the tax commitment for all 21 Franklin County towns and plantations.
He said there also would be a significant loss of tax revenue to the county if TransCanada were able to retain a portion of its estimated $1.6 million in annual property taxes.
“The concerns are whether or not this is an appropriate use of a TIF,” he said. “I have real problems and feel they should pay their fair share of county services.”
Cota said after the meeting that he would wait and see how the agreement is worked out and if TransCanada will agree to pay money directly to the county in lieu of taxes to cover its share of fire, police and waste disposal services.
“I definitely feel more positive, but there is still a long way to go,” he said.
Jay Town Manager Ruth Marden asked TransCanada’s representative, Nicholas Di Domenico if the project would go ahead without the TIF.
He said it all depends on the company’s board of directors, which meets in May or June, to determine if it is still viable. The cost of equipment, including the European-made turbines, has increased dramatically because of the lower value of the dollar, which makes imports expensive.
The Unorganized Territory of Maine has no local, incorporated municipal government and is administered by the state. There are more than 400 townships in the territory that covers more than half the area of Maine.
On Tuesday, a few town officials, residents and environmental advocates crowded into the small meeting room when the county commissioners met with consultants Gregory Mitchell and Noreen Norton of Eaton Peabody Consulting Group of Augusta. The session was one of five planned before the commissioners vote on the TIF district in May.
If the deal is approved by the commissioners and the Maine Department of Economic and Community Development, it would be the second county to establish a TIF for a wind farm in Maine’s Unorganized Territory.
The first one approved was for a 38-turbine project on Stetson Mountain in Washington County. In that deal, the county keeps about $3.75 million of the $9.4 million in tax revenues to be generated over the next 20 years.
The next informational meeting on the TransCanada project will be April 8 with a time and location to be announced. A public hearing will be held April 15 and commissioners could potentially vote on the proposal in May.
Commissioners stressed they were still exploring the idea and no decisions have been made.
27 March 2008
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