Dixfield selectman get a lesson in TIF's

DIXFIELD — Selectmen met with a representative from Maine Revenue Services on Tuesday night about possibly creating a tax increment financing district for the proposed multimillion-dollar wind power project on Colonel Holman Mountain.

Erin Cox/Sun Journal

Mike Rogers of Maine Revenue Services, second from left, explains to Dixfield selectmen Tuesday night what is involved in a tax increment financing program and what implications the town is facing with the proposed wind turbine project on Colonel Holman Mountain.

Patriots Renewables LLC of Quincy, Mass., wants to erect 13 wind turbines on the mountain ridge.

Mike Rogers, assistant director for Maine Revenue Services, explained how TIFs work and gave scenarios showing possible tax rate decreases in TIF districts.

TIFs are a public financing method which have been used as a subsidy for redevelopment and community improvement projects.

Selectman Malcolm Gill asked about using a TIF program to help build and improve roads.

Rogers said TIF programs would need to be approved through the state and they have certain restrictions. Normally a TIF requires some form of economic development within a town and requires the program to cover a set district. He said it has been approved in the past for towns looking to improve and develop roads for logging projects.

Rogers has worked with other towns, including Roxbury and Rumford, to explain the tax implications for a large commercial project.

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Edward Bulger's picture

I live in Rumford too

Out of state people want wind towers in our area to power their needs. Why don't they just simply build them in their own back yards then?
The greatest asset we have in this part of Maine is our hills mountains and the wildlife they support. This God givin gift will be forever ruined if we let these rich thieves steel what we have and we will never make up for that in tax dollars. The people who want to sell their land to make a quick buck to wind turbine companys are short sighted.When they bought their land was it always their plan and dream to have wind turbines on it or to sell the wood that normally grows there.
I no longer ski or use recreational vehicles but when I look out accross the street from my home I see Barker Mountain and the ridge line that I hunted and hiked in my youth. To imagine that ridge lined with some greedy rich mans ugly alien looking eye sores blows my mind. You know you can't prove the savings in tax dollars they say we will make.
There are much more efficiant ways to make electricity then these wind towers that are built in other countrys using coal fired power sorces to make the steel. Real green isn't it. The real reason the wind ordinance didn't pass in Rumford is because the majority of the people living in this town do not want wind power period. We see what is happening in Roxbury and are sickened by it. The complaining that it has created should wake you up. When these giant scars on Record mountain are operational we will all see hear and feel what a mistake they are first hand.
I went to Roxbury Pond last Friday to have lunch with my wife. I was driving behind a pick-up truck with out of state plates. On the rear window was a sticker that read Wind Power. It was plain to see he was one of the out of state poeple making money off the wind project. I couldn't help think there was something about that sticker that was missing. Wind Power-stinks? No. Wind Power Is Inefficiant? yes but no. Oh ya it should have said Wind Power Blows.

Ed McCaffrey's picture

I live in Rumford, and don't have a say in Dixfield

but I have yet to hear, from any of you, what you have to offer as a viable alternative to wind energy. None of you naysayers want wind in their backyard because it might, MIGHT, be noisy, cause flicker, kill birds, reduce tourism, blah, blah blah.
I guess you'd rather have coal,or oil (which are both environmentally unfriendly but you can't really see them), or hydro (which has been around for years and killed how many millions of fish?). There is also solar energy, which in this neck of the woods is even more sketchy than wind power but isn't an option because you need acres of land for solar farms too.
What you people fail to realize is that humans are slowly killing themselves and their only planet because of their insatiable need for electricity and power. Personally, I think that a little noise is a small price to pay for even an unreliable source of power that keeps us from suffocating ourselves with carbon monoxide. So some birds die and some animals are displaced!! Big deal!!!
I would much rather have a planet that is a little less hospitable to wildlife and more hospitable to humans than the other way around. And for the humans that complain about noise but run a fan or AC unit all the time, STFU. There's no difference in the noise factors if the setbacks are followed.
Last but not least, most of you who are doing the complaining are not property owners who will be affected if the windmills are put in. A property owner should be allowed to do whatever he wants with his property, up to and including nuclear reactors if that's what he wants to do.
It's simply the fact that they are visually unappealing to you that is the most offensive. I personally think they are majestic and beautiful works of engineering and I know a lot of people who agree with me.
By the way, I'm going to take this opportunity to advocate for moths, mosquitos, and other nocturnal insects in asking for a ban on Bats and those annoying electric bug zappers that I hear going off all summer long. They keep me awake and cause me distress with the deaths that they are causing.

Hart Daley's picture

Ecological Destruction - Environmental Nonsense - Get the Facts

From an ecological perspective there is absolutely no way one can defend mountaintop industrial wind development.

Blasting and mountaintop leveling cause irreversible damage to soils, hydrological flows and the unique assemblages of plants and animal. Thousands of bats and birds will be killed and many species of wildlife, including bear, moose and deer, will be forced to flee from the massive ground vibrations and the pulsating of high- and low-frequency noise.

If, as envisioned by the state, 360 miles of mountaintop industrial wind structures are built (resulting in 50,000 acres of clearcut), the visual pollution of 400-foot towers with flashing lights, and the accompanying noise pollution, will penetrate thousands of square miles of the Maine wild lands. It would completely alter the bucolic nature of the quiet Maine countryside.

The biggest fraud being perpetrated by the wind developers is that mountaintop industrial wind will somehow reduce our dependence on foreign oil and somehow result in lower greenhouse gas emissions.
THE FACTS ARE THE FACTS.

Mountaintop industrial wind use will not reduce our consumption of oil and will not reduce green house gas emissions. Only 1 percent of the electricity in the United States is produced by oil. In Maine we have two oil-fired electric power plants, which, because of the high expense, are only used when peak demand outstrips supply.
Three separate studies have now documented that industrial wind does not reduce greenhouse gas emissions. It is a simple concept to understand. Since wind energy is intermittent and unreliable, it cannot be counted on, and thus requires backup fossil fuel power availability.

When the wind blows, a fossil fuel plant has to be turned down or off. When the wind stops blowing (which can vary on a minute-to-minute basis), the power source has to be ramped up again. It is analogous to driving in stop-and-go traffic -- more fuel is consumed and greater amounts of carbon are emitted.

Yet the American Wind Energy Association (a lobbying group paid for by the wind developers) still is trying to paint industrial wind as a "green" renewable energy. This is analogous to the tobacco companies for years telling us that cigarette smoking is not hazardous to our health. And, like the tobacco companies, the wind industry has its paid-for scientists and environmental groups promoting its mantra.
If the ecological disaster of mountaintop industrial wind development is not enough to convince people to say no, then just consider the economic impacts. Wind development would not even be a dream if it were not for the massive federal subsidies -- your tax dollars!

If Maine constructs 360 miles of mountaintop industrial wind towers, $5 billion of your money will be placed in the bank accounts of the wind developers. Currently, a wind developer can get 30 percent of a project's cost upfront from the U.S. Treasury. This does not include the loan guarantees, accelerated depreciation and potential production tax credits. While wind developers like to point out that they get a significantly smaller piece of the total energy subsidy pie than other energy projects, the fact remains that on a per-megawatt-produced basis, wind subsidies are 12 to 20 times greater. (Wind is subsidized at $23 per megawatt -- the next nearest subsidy is nuclear at $1.59 per megawatt).

The bottom line is that mountaintop industrial wind energy is two to three times more expensive than conventional sources. If you add the cost of the necessary new transmission lines and associated facilities, the price differential gets even bigger.

Why would it be in Maine's interest to destroy our mountaintops to create energy that is three times more expensive and will undoubtedly raise our electric rates? This becomes even more absurd when one considers that Maine already has a surplus of energy -- yes, we are a net exporter.

The Maine wind developers like to talk about the contribution of about $800 million spent to date on industrial wind in Maine. What they fail to mention is that most of this money was provided by federal government subsidies -- our tax dollars. In addition, the bulk of the $800 million paid for turbines that were Manufactured in foreign countries.

In truth, the economic benefit to Maine thus far has been small -- only a few hundred temporary construction jobs. The irony is that once these projects are completed, they create very few permanent jobs.
The increased cost to ratepayers and taxpayers for a small number of temporary construction jobs is many times more than the wages paid by the developers for these jobs.

So how do these developers get away with bilking billions of our tax dollars to generate wind energy by destroying our mountaintops with industrial turbines, which in the long run are going to significantly raise our energy costs? This is a con job and a scam.

By any measure, mountaintop industrial wind use is uneconomical. It will not only raise electric rates (which is terrible for business), it will also have the unintended consequence of undermining Maine's most reliable and profitable industries -- tourism and recreation. It is our "quality of place" that brings 34 million visitors each year. It is our quality of place that generates $10 billion in sales each year. Our quality of place is the pot of gold at the end of the rainbow.

If we destroy the golden egg, our competitive advantage will disappear and folks will no longer want to come to "Vacationland," where every mountain has monstrous 400-foot towers with flashing lights. They might as well stay home in New Jersey.

Another unintended consequence of mountaintop industrial wind development is its impact on property values. Recent nationwide studies have documented that property values plummet 20 percent to 40 percent within a two-mile radius of industrial wind turbines. There are already scores of folks in Maine who, because of the noise and visual pollution of wind turbines, would like to sell and move. However, most of these folks are stuck because nobody wants to buy their property.

How can we let these profiteers do this to Maine families?
In the final analysis, this house of cards the wind developers have built is going to come crashing down -- but not because these folks have seen the light, become less greedy and developed an ecological conscience.

Yes, like Enron, mountaintop industrial wind development is based on a pyramid scheme that is unsustainable. Industrial wind not only is unreliable, but the cost, even with the huge subsidies, cannot compete with the cost of natural gas. At $4 per million BTUs, natural gas costs would have to more than double to become more expensive than mountaintop industrial wind, with its $6.65 per million BTU subsidy. Switching to natural gas on a national scale -- replacing coal -- would have the added advantage of reducing electricity generation-related greenhouse gases by as much as 75 percent.

In conclusion, I want to make it clear that I believe strongly that we need to move away from fossil fuels. We need to pursue renewables -- residential/community wind and solar, geothermal, micro-hydro, etc. Energy conservation and efficiency should be our top priority.
Unfortunately, intermittent and non-storable mountaintop industrial wind power is not the answer. It is not the benign "green" industry some would like to have you believe.

The environmental damage to this place we love and call Maine will be catastrophic. It will significantly raise our electric rates, which will stifle business development and drain dollars out of the pockets of Mainers. It will reduce tourism and recreation revenue as well as strip Mainers of wealth through reduced property values.
The gold rush of wind developers, feeding at the trough of federal and state subsidies, must be stopped before Maine is transformed from a wild and bucolic paradise to an industrial wind wasteland.

Comment by: Jonathan Carter; director of the Forest Ecology Network.

Do the research citizens of Dixfield! If it sounds too good to be true it usually is "too good to be true" Find out the facts for yourself.

Hart Daley's picture

TIF's equal NO TAX REDUCTION for property owners

What's a TIF and why should you care?

What’s the difference between “Standard Taxation” and a TIF and why should you care?

What happens to your taxes if your town lets a Wind Company put up some wind turbines? What is the difference between “Standard Taxation” and a TIF agreement with the wind companies?

So far, all wind projects in Maine have been TIF’d, except for Freedom’s three turbine project (Patriot Renewables). Mars Hill, Stetson, Kibby, Lincoln, Lee, Winn, and Oakfield, and Vinalhaven have all negotiated TIF’s with the Wind Companies.

Standard Taxation (Jackson, Maine example, figures by Maine State Municipal Revenue Service)

Under standard taxation, your town’s school tax (by far one of the largest items on your town’s budget) and county taxes are determined by the state’s valuation of your town. The higher the value of your town, the larger your percentage of the county and school district’s budget your town will pay. There is a direct and unavoidable relationship between your town’s value and its share of the county and school’s budget. Conversely, the other towns in your county and school district benefit by your town’s increased value in that their percentage of the county and school budget goes down a little. Let me make it clear that while the turbines in your town will pay a lot of dollars in school and county taxes (a common wind company argument), this money is not “extra” money for the school district. This money only serves to take the place of money that the other towns in the school district would have had to pay, thus making them happy that you decided to approve a wind project.

The state reports the value of your town every year. But since this a long and involved process, they are always two years behind. So basically, if your town constructs turbines this year, the state doesn’t “catch up” for two years and for some reason I can’t explain, the school district doesn’t catch up for three years.

So for the first two years, your town has this new source of tax income (the turbines) that the state can’t see and won’t see for two years. Depending on how many turbines your town has, this could be a considerable amount of money. Your town could choose to spend this new income knowing that it would last for only two years, or they could decide to reduce everyone’s taxes for two years.

The following example uses figures from Jackson, Maine (pre-turbine town value of $34,000,000). The figures were prepared by the Maine Municipal Revenue Service.

Let’s say Jackson puts in eight turbines (a $24,000,000.project) and we don’t agree to a TIF. Our mill rate falls from .02065 to .01209 and things look great for two years until the state re-evaluates the town (they are always two years behind). Because of the new, much higher town value, the state reduces our municipal revenue sharing, and the county ups our county taxes. The mill rate goes up, but things are still not too bad.

In the third year, the school district “sees” the turbines and raises our share of the school budget by a huge $250,000.. Now our mill rate jumps back up to almost what it was in the first place before the turbines. In fact the owner of a $150,000. piece of property in Jackson would save only $120. off his taxes each year. The other towns in the county and our school district are happy, because their taxes go down a little bit because Jackson is paying a larger percentage of the school and county budget.

We should be paying more, because our town is worth more. That’s the way it works with “Standard Taxation”. At least we had two good years!

What is a TIF (Targeted Incremental Financing)

A TIF is a way of shielding the increased valuation to your town that a project (like turbines) normally brings, from the state, the county and the local school system. The proceeds from the TIF cannot be used for the reduction of property tax…so no tax relief! TIF’s were originally invented to lure companies with lots of good paying jobs to your town, and they were well worth it. But since a turbine project produces so few good paying jobs (about one job for every six to ten turbines), that’s no longer the case.

How to figure a TIF. (Jackson, Maine example)

It’s fairly easy to figure. Take our present mill rate (.02065), times the value of the wind project, say $24,000,000 (eight turbines times three million each is $24,000,000.) and we come up with $495,600. That’s approximately the tax amount that Mt. Harris would have paid under “Standard Taxation”. Next, the town sits down with Mt. Harris, LLC and negotiates what percentage the town gets to keep and how much Mt. Harris gets to put back in their pocket to help them finance their project.

In most TIF’s negotiated so far, the town gets 40% and the wind company keeps 60%. So out of that $495,600. we get to keep 40%, or $198,240. and Mt. Harris puts the rest, ($297,360.) back in their pockets. Sweet deal for Mt. Harris! That’s what we get the first year, but because the turbines are depreciated 2% (maybe even 3%) each year, by year 21 we only get $132,424 or less. There is a catch though. We can’t use the money to give back to our citizens in the form of tax relief, we have to spend it on state approved “economic development projects”.

Next you create a TIF district.

TIF districts can be only 2% of your town’s land mass. It can be separated so that you have several small areas.

Now you decide how to spend your money.

Your expenditures have to be pre-approved by the state and the majority of the money has to be spent within the TIF district, and only spent for economic development. Lincoln, for example, is going to buy a building, tear it down and put up a parking lot … cost $1,000,000. I think they also did some lighting. Other towns are going to build business parks, etc., but most towns just do some paving at $250,000. per mile. Oakfield managed to get a new fire station approved. Some towns have added economic development staff and set aside a considerable amount of money for lawyers to help administer the TIF.

Some (very little) spending is allowed for community wide projects. But no community swimming pools and no new town offices or community centers or ball parks are allowed! Some scholarship funds and one or two day care centers, staff and building, have been approved.

TIF’s and your local school district.

The state has told me that the other towns in the school district could vote not to honor your TIF. They could become angry because your town is not paying its full share. If they did that, your town could be forced to raise hundreds of thousands of extra dollars to pay the school district. And remember, paying off your school district with TIF revenues is not an approved use the money according to the state. Neither can you go to the Wind Company and re-negotiate. You signed a contract!

History of TIF’s and Wind Projects in Maine

All of the wind projects built and proposed, permitted projects in Maine have been TIF’d, except for the three turbine project in Freedom.

Mars Hill has negotiated the best so far, but they were the first and First Wind has learned a lot since then. Mars Hill broke all the rules on their TIF and you will never see another one like it. Lee and Winn negotiated a standard 40/60 . Lincoln and Burlington did a little better with a 50/50 split.

Oakfield had a TIF at one point, but they seem to be getting a sweeter deal (bribe) from First Wind. I don’t know if the TIF is still in effect or not. If it is, First Wind may be using their 60% savings from the TIF as bribe money. Oakfield has just learned that First Wind’s project has grown by 12? turbines and that the turbines will larger than originally thought, too. So things are in a bit of a flux in Oakfield and a lot of people are quite upset that the deal they thought they negotiated with First Wind seems to be changing.

Vinalhaven’s crafty negotiators managed to keep 10% of the TIF proceeds and gave 90% back to Fox Island’s Wind (the “for profit” side of the project).

In a LURC district such as Stetson, and Kibby, I believe the county kept 40% and the Wind Companies kept 60%. But it is a little different in LURC districts and I’m not exactly sure how it operates. I read recently there are so few economic projects in the works that qualify for TIF proceeds in those areas, that the money is just sitting there.

Recently, in a Somerset County meeting, First Wind proposed a 30/70 split (they keep the 70% of course).

If Angus King has not asked for a TIF yet for his Highland Project, he certainly will.

Tax Shift Tables

When a wind company shows a town a TIF proposal, they always include a “tax shift table”. This table purportedly shows the tax savings (in education taxes, county taxes, and revenue sharing) to the town if they go for the TIF. In Burlington’s case (12 turbines), the tax shift benefit over 35 years would be $8,817,534.

In reality, it shows what the Wind Company should have paid in taxes under “standard taxation” over that same 35 year period. But to many people, at first glance, it looks like a heck of a deal.

New, $4,000. per turbine law

The state, as I understand it, has a new law that mandates the Wind Company pay the town $4,000. per year per turbine. In Jackson’s case, that would mean about another $80. per year off your taxes (on a property valued at 150,000.).

Conclusion

A wind project in your town or LURC district will give you a slight reduction in your personal property tax if the project is not TIF’d. There would be no reduction in personal property tax if the project is TIF’d.

Considering all the negative effects of wind turbines on people and wild life and the loss of property values near turbines and the small number of jobs created, they just aren’t worth it.

Comment created by: Tom Olds

Most people look at a TIF proposal and see the 'free money,' and then never bother to look any further. Maine Revenue Services can provide the solid numbers, and as far as I'm concerned, they are doing a great disservice to the People of the State of Maine by not publicising the truth about these scams.

Doreen Sheive's picture

think long and hard

Maine has been a real windfall for First Wind and it subsidiaries. These windmill companies receive millions of dollars from the federal government in tax exemptions. In my opinion, they do not need TIFs from us Mainers. They are pulling the wool over your eyes. Take the windmill valuation and reduce the tax burden to your residents. Also, the windmill company is supposed to give you money for each kilowatt produced or each windmill (I am not sure exactly what it is). You will find that you have more money to invest in infrastructure. Set up a good sized capital reserve account for performing this and other work. And, I think these locations should demand that a percentage of the power produced be kept in Maine. I am also concerned about the fact that First Wind keeps setting up all these subsidiaries -- WHY?

Dan McKay's picture

Mr. Rogers also stated that

Mr. Rogers also stated that any TIF proposal would require a vote from the citizens of Dixfield.
If tax revenue from a commercial venture is placed in a TIF program, there will be NO money to reduce individual property taxes.
Dixfield should really think about forming a committee of citizens to review and research wind turbine development as it has many unique characteristics that other commercial ventures don't have.
The selectmen and planning board have no interest in performing this duty.
As I watch Rumford, Sumner, Peru, Phillips, Weld, New Vineyard, Paris, Bethel and Wilton work towards addressing wind turbine issues, I wonder why Dixfield hasn't recognized the need to look at the possible risks to health, environmental and economic impacts.

Dan McKay's picture

It's interesting how town

It's interesting how town officials are prone to chastise citizens for not attending public meetings, when, in fact, 2 of the 5 selectmen did not attend this meeting. Did anyone see this meeting advertised ?

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