Year Created: 1998
Type: Education Property Tax Utilization Authorized by VEPC under EATI Program (32 VSA 5401(10)(E)
Split of Increment:
Original: Education Fund = 100%/0% and Municipal General Fund = 100%/0%
Beginning 2010: Education Fund = 75%/25% and Municipal General Fund = 75%/25%
The Milton North/South TIF Districts were the first and only Districts authorized for utilization of incremental education revenue by the Vermont Economic Progress Council (VEPC) as part of the Economic Advancement Tax Incentive (EATI) program (Act 71). Approved by the Milton select board in March 1998 and VEPC in November 1998, the Milton North/South TIF Districts actually represent two separate, non-contiguous areas: the Catamount TIF (South) was created around the existing Catamount Industrial Park with TIF financing intended to improve the infrastructure so that additional growth could take place within the industrial park; and the Husky TIF (North), created to encourage Husky Injection Molding Systems to develop a corporate campus at the north end of Milton. Since the creation of the Districts, the municipality has treated the Districts as one, and in 2011, the General Assembly enacted a retroactive provision that allowed Milton to treat the two Districts as a single district for purposes of accounting and reporting requirements (§15b, Act 45, 2011).
The original plan for these TIF Districts anticipated public infrastructure totaling $27.3 million, including $9.5 million for wastewater treatment capacity and collection expansion, $14 million in highway improvements, and $3.8 million for water system and fire safety. The town anticipated that about $12 million of the infrastructure costs would be financed with TIF revenues. The town planned to pursue state and federal grants and payments from Husky for the balance.
The town encountered numerous difficulties that delayed projects and increased costs, including demands for a wastewater plant rather than a smaller-impact decentralized system, increased wastewater connection fees, and permitting delays. Total cost for the wastewater project alone grew to an estimated $17.3 million. Because of these delays and the economic downturn that caused a smaller-than-planned build-out by Husky, infrastructure projects started very late, some infrastructure projects were cancelled, and expected increments were not realized.
Nearing the end of the original TIF revenue retention period, the wastewater treatment project was completed, but had over $15 million in outstanding debt, the water connections were completed, some of the transportation projects were completed and about $6 million in debt remained. All fire and safety improvements were made with no remaining debt.
The value of the properties within the TIF Districts had increased by only $36 million compared to the $100 million expected increase.
In 2006, the legislature enacted special provisions (§2j, Act 184, 2006; amended by §68, Act 190, 2008) allowing the Milton North/South TIF Districts to be extended for an additional ten years.
Among other changes, this legislation limited the utilization of education property taxes to 75% of the incremental revenues generated to finance improvements that serve the District and required that an equal or greater proportion of the municipal increment go to finance the TIF debt. The application was submitted on March 26, 2009, extending the ability for Milton to incur debt and retain incremental property tax revenue for the Milton North/South TIF Districts until March 31, 2019.
Public investments of $9.3 million have leveraged $36.5 million in private development. The base value of the District was about $27 million upon creation in 1998. The current value as of Grand List 2015 was $61.3 million, an increase in value of $20.7 million. Before the TIF District, the properties sent about $250,000 a year to the Education Fund. When the TIF debt is retired in a few years, the properties will send more than $800,000 to the Education fund each year.
As of June 30, 2016:
Approximate Value of TIF Supported Infrastructure: $9,278,670
Approximate Value of Private Investment: $39,539,253
Ratio of Public Investment to Private Development: 1:4