SKOWHEGAN, Maine — Town officials have once again rejected a grant application from a downtown law firm to use $13,000 in tax increment financing money to fix a storm-damaged wall, as they continued to disagree over the best use of the economic development program.
John Youney, the law firm’s president, called the board’s decision unethical and immoral.
“I just hope that next time you go to move goal posts, you do that before you have an application in front of you,” said Youney, 71. “This is patently unfair to the citizens and the inhabitants of Skowhegan to move the goal posts like this.”
The Skowhegan select board, with only three of five members present, had initially rejected the application from Merrill, Hyde, Fortier & Youney at 95 Water St. earlier this month.
After another lengthy debate Tuesday night, the board reached the same decision with full attendance. The vote was 3-2: Amber Lambke and Elijah Soll were in favor, while Chair Whitney Cunliffe, Vice Chair Kevin Nelson and Ethan Liberty were opposed.
As with the first vote on the application, those opposed to it were concerned that current guidelines for how the town is to use the TIF money need to be changed.
They were focused less on whether the application, which an advisory committee already recommended to be approved, met the current criteria in place to use the funds. Nelson, who voted against it, said it did in fact meet the criteria, but the board still had the final say on how the funds are to be used.
TIFs are an economic development tool that many municipalities use. There are more than 400 TIF districts across Maine, a state database shows.
A TIF designates an area where a municipality captures increases in property tax revenue as a result of commercial investment over a specific period of time.
The taxes on the original assessed value continue to go into the municipality’s general fund as with any other property. The taxes on the increase in valuation — the tax increment — are set aside for specific projects, which must be established when the municipality creates the TIF.
As another possible benefit to the municipality, the increase in valuation of the TIF district is sheltered from the state-determined valuations used to compute a municipality’s share of the school district and county tax assessments as well as state aid for education and revenue sharing. A lower state valuation, for example, generally means the municipality contributes a smaller share of the school and county budgets.
Many TIFs, but not all of them, also include a credit enhancement agreement, in which the town returns a certain percentage of the increased tax revenue to a developer.
Skowhegan has four TIFs, all of which voters have approved at town meetings and received further state approval.
The 30-year Downtown Omnibus TIF was created in 2006, renewed in 2017 and expires in 2036.
Youney’s firm earlier this spring applied for the grant from the downtown TIF to repair a storm-damaged brick wall, some of which was threatening the roof of neighboring Key Appliance. He argued, and the town’s Downtown TIF Advisory Committee agreed, that served the main purpose of the TIF, which is to invest in the downtown area to raise property values.
Insurance did not cover the damage, Youney said. In response to criticism from some that lawyers, often thought to be well-paid, would seek a public grant, Youney said he and his law partner handle mostly court-appointed child protection cases that come with lower hourly rates set by the state.
Youney also said when people find themselves in times of economic hardship, “the lawyer is the last person that is ever paid.”
Cunliffe, the chair, read from prepared notes the reasons he opposed the grant. Among them, he said property owners have faced significant tax increases and the TIF diverts tax revenue from supporting general town operations. He also noted the town is years behind on its audits, leaving it in a precarious financial position.
Cunliffe suggested that half of the TIF revenue be used for more general purposes, like downtown infrastructure, maintenance, public works, the nonprofit Main Street Skowhegan and Coburn Park. As for business grants, Cunliffe said he wanted to see stricter provisions in place to ensure businesses have skin in the game.
“I’m not against TIFs,” Cunliffe told Youney. “I just think, given our financial situation, we should change the parameters a little bit and try to move on.”
Lambke, who chairs the town’s Downtown TIF Advisory Committee, said that body could discuss the select board’s desired changes to application requirements.
Soll agreed, and questioned whether there would be legal ramifications of denying Youney’s application before any changes are made.
“We don’t want to go moving goal posts,” Soll said. “I don’t think that’s a good practice.”
This story was originally published by the Maine Trust for Local News. Jake Freudberg can be reached at [email protected].
