NORTH SMITHFIELD – A study is underway to see if a unique financing tool could be used to fund improvements to the Route 146 corridor, and officials with the firm contracted to determine if such a plan is feasible presented general information on the concept this week.
Consultants with Camion Associates said creation of a tax increment financing district would “probably work in some fashion,” in North Smithfield, if the town chooses to pursue it. The firm, hired through funds from the Economic Development Commission, is currently working with the town tax assessor to estimate the potential for new development along the corridor, a busy highway some say has been held back in terms of private investment by its lack of water and sewer lines.
“The purpose of tonight – we’re not making any decisions,” said Town Administrator Scott Gibbs in introducing the concept. “This is an informational meeting to tell you what tax increment financing is, and what it’s not. If the results are positive, then we would move to the second stage.”
Jim Damicis, senior vice president for Camoin, explained that tax increment financing, or TIF, is a method to catalyze economic development that allows future tax revenue to be dedicated to infrastructure projects.
“It dedicates future revenues from growth – it has to be from growth – so that you can support primarily infrastructure improvements,” Damicis said.
Camoin Senior Economic Development Analyst John Walker provided some of the details. A TIF district, Walker said, is applied to a defined area for a specified time period.
“As time goes by, there’s new development in that district,” Walker said, noting that any new revenue that comes in from the district is put into a special “bucket.” “With that fund you can finance a wide variety of investments geared toward economic development.”
The projected income can be used to underwrite special bonds, with the revenue generated used to pay back the loan.
Gibbs noted that the town is considering the option, in part, due to the state-mandated 4 percent cap on tax levy increases.
“We’re living in an environment of 6 percent inflation,” said Gibbs. “We’re losing money. We can’t invest in our assets, we can’t invest in our infrastructure without violating the levy cap.”
A TIF arrangement, Gibbs explained, is not subject to the cap.
“We’re looking at this mechanism because it might be the only mechanism that we have to fund that infrastructure investment,” he said.
The town, Gibbs noted, is only in the first stage of considering the option. Once the preliminary evaluation is complete, Camoin will provide a recommendation.
“If it doesn’t make sense you can stop at that point,” said Damicis. “It probably is going to work in some fashion, if you choose to do so.”
If the financial tool makes sense as a means to fund improvements to the corridor, details will ultimately be laid out in a TIF District Master Plan. The plan would require input from multiple town boards in a public process, including hearings, and ultimately, approval by the Town Council.
Walker noted that such plans are typically implemented for around 20 to 30 years, but are flexible and can always be changed.
“It could be whatever seems right for the community,” explained Walker.
Town officials can also determine exactly how much of the revenue from new development should go in the TIF pot versus the general fund.
“It’s not all or nothing,” said Damicis, noting that to work, the tool can only apply to private investment that’s taxed as commercial property.
For taxpayers, he said, nothing would ultimately change.
“It is not a different tax,” said Damicis. “You won’t notice any difference on your taxes.”
The session on Monday also included questions from the public, and resident Michael Clifford asked what would happen if the town ultimately didn’t bring in as much revenue as anticipated to pay back the bond.
Damicis noted that the analysis would focus on a conservative estimation of revenues – while being generous on costs.
“That’s why it’s important to use conservative revenue estimates,” he said, noting that no matter the outcome, the town would still be obligated to pay back the debt.
Gibbs said that it is still too early in the process to discuss what type of development could actually take place in the corridor. He said that Pare Corporation is also working on preliminary engineering for water and sewer lines to help determine that cost.
With a multimillion-dollar highway improvement project now underway, the group said it may be the right time to leverage the town’s position to create such growth.
“That road improvement gives the opportunity to now layer on a financing mechanism for other kinds of development,” said Damicis. “You can change the trajectory, if you will, from an economic development perspective, of that corridor.”
The firm said the outcome of the feasibility study will be presented at a future meeting.
Folks beware, a TIF is only a scheme to keep voters from weighing in on expenditures your politicians are trying to hide. Gibbs, Ezovski, and Biron should all be ashamed of themselves, as this type of spending needs to be addressed by the voters.
Let’s review the lies in the statement’s made by different people.
First statement, For taxpayers, he said, nothing would ultimately change. “It is not a different tax,” said Damicis. “You won’t notice any difference on your taxes.” So the town will borrow $20M, then wait years if ever for someone to develop a project in that area and be willing to pay high taxes but will demand a tax break or tax stabilization to invest. Know the bonding company will need the bond to be paid while the town waits for the dream of development at a significantly high costs than any revenue will ever be collected so who pays the bond in the mean time or half the bond when development may occur. I will tell you the taxpayer. So taxes will be increased to fund the bond now and in the future when zero additional revenue is collected.
Second statement. Gibbs noted that the town is considering the option, in part, due to the state-mandated 4 percent cap on tax levy increases. A TIF arrangement, Gibbs explained, is not subject to the cap. So if you read between the lines Gibbs is going to tax homeowners well above the cap and 6%. Does Gibbs understand that taxpayers cannot afford a 6% to 10% tax increase let alone a 4% increase. Now Gibbs also does not tell you that the town can bond a tif without voter approval. Here is a better idea tell all the unions times are tough for taxpayers so you will receive a zero percent increase for the next 3 years as taxpayers have sacrificed for the last 10 years so now it is now your turn.
Let’s face the facts with this disastrous project, Gary Ezovski wanted to provide water for Anchor Subaru and thinks additional development will occur with zero availability of land exists to support any significant potential tax revenue growth. Second will Woonsocket have the capacity to provide the limited water resource. Mr. Gibbs has proven to be the puppet for the group that has zero financial knowledge who wants to put the town into a highly leveraged debt position that the town will never recover and may go bankrupt. Also any other projects or capital improvements on current infrastructure will be unaffordable and those buildings and equipment will continue to deteriorate.
A simple quick analysis of this dream proves to be fiscally disastrous and fiscally irresponsible.
Hope is not a strategy!
Borrowing from Peter to pay Paul is not a strategy!
This last minute attempt is either desperation, the result of none to poor planning or a con job; None of which work for all residents.
Has anyone thought of the fact that the flow of traffic and patterns have been configured already?
Scott Gibbs has shown us true colors of
Nothing but development at all costs-Took what 4 months?
There is no fancy acronym for a bad idea.
If only we had Beth Newberry instead.
Many great comments about this waste of taxpayer money topic on another website. But the conclusion of the topic is taxes will increase because one person wants to do a favor for someone by disguising the project with potential tax revenues that don’t exist. A simple math analysis proves that this idea will never generate any significant tax revenue while costing taxpayers millions. The best part is the idea is so bad they want to avoid a bond referendum by using a tif. Spending any money investigating this idea proves that Gibbs is not the person to be the town administrator when he needs to use tricks to fund an ill-fated project and increase taxes. Gibbs you do have other methods to fund the investment which is a bond referendum but you know it will be defeated and the dream is over.