New law could speed Newport’s development

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copyright the Chronicle May 17, 2017

 

 

by Joseph Gresser

 

NEWPORT — The Vermont House and Senate have come to an agreement on an economic development bill that, among other things, will permit the creation of six new tax increment finance zones.

“We shook on it, but haven’t signed it,” said Representative Mike Marcotte of Coventry, who was a member of the conference committee charged with ironing out differences between House and Senate versions of the bill, S.135.

The zones, also known as TIF districts, are designed to help communities attract development without raising taxes on its existing Grand List. A town that needs to upgrade some of its infrastructure in order to attract new development issues bonds for the cost of the work.

It can then use additional tax revenue generated by the new development to pay off the bond.

That includes municipal taxes and, in the past, 75 percent of the state education tax collected on the new development. Under the new bill that percentage would fall slightly to 70 percent, leaving the education fund with another 5 percent.

Some legislators are concerned the TIF program takes too much money out of the state education fund, Mr. Marcotte said Tuesday. S.135 calls for the Legislature’s economist, fiscal office, and the state auditor to see what effect the districts have on a community’s economy.

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