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Legislative Notes for May 16, 2013

May 12, 2013

Last week I reported that we were starting to see some positive movement toward a resolution of the concerns raised by the State Auditor in regard to tax increment financing districts (TIF) in several communities including Milton. That momentum continued this week as the House Ways and Means committee worked most of the week on the bill passed by the Senate. The amended version of the bill came up for action on the House floor on Friday and passed. The House will take it up again for final action on Monday and then it will return to the Senate for their final approval before going to the Governor for his signature. Upon becoming law, the governing body of each municipality with an existing TIF will then have an opportunity to ratify or decline the resolution provisions outlined in the bill. A municipality that chooses to decline, will potentially be subject to litigation for the amounts identified in the State Auditors final report.

The bill passed by the Senate, would not seek to recover underpayments to the education fund identified in the State Auditors final report as long as changes were made going forward to resolve identified issues, clarified many of the vague rules pertaining taxable value, established new reporting requirements, established how education tax increments may be used in the TIF district and for how long, identifies and directs the Secretary of the Agency of Commerce and Community Development to administer the program and create rules for enforcement action against a TIF community that violates law, establishes a regular schedule for the State Auditor to conduct performance audits of TIF districts and required each town to pay $15000 to the State Auditor toward the cost of the 2011/2012 audits. The bill also inadvertently failed to identify the Milton Town Core TIF district.
Upon arrival of the Senate bill in the House ways and means committee, it became quite clear that House leadership wanted a resolution that included payment for the unresolved issues from the TIF communities. Giving amnesty as the Senate approved and the Governor had sought was off the table. At this point, I took an active role in the Milton discussions with Auditor Hoffer and Deputy Auditor Mesner. It became quite clear that they wanted to resolve this issue as much as I wanted to resolve it for Milton and the entire state TIF program. After numerous communications with the Town Manager, Town Clerk, Milton counsel on this issue, Deputy Auditor Mesner, VLCT representatives, legislative colleagues, representatives from the other TIF communities and House leadership we came to a good faith understanding. This understanding subject to Selectboard approval, would (A) require Milton to pay $22,000 over the next two years back to the state education fund, (B) require an internal transfer of $160,000 from town funds back to the Catamount Husky TIF fund over the next five years and (C) require an internal transfer of $17,000 from the Town Core TIF fund back to the Catamount Husky TIF fund. It also reinstated the Milton Town Core TIF, established an appeals process for contested TIF cases, eliminated the $15,000 payment to the State Auditor for the previous audit and retained all other provisions approved by the Senate.
Having worked closely with Milton Town officials over the years on TIF legislation, I have remained confident that Milton did not owe the state education fund more than three million dollars as reported in the Auditors final report. To date, I am sure that there are hundreds of hours of staff time and thousands of dollars in professional services that have already been expended on this issue. Therefore, I feel that paying $22,000 to the state and moving $177,000 from one town account to another over time is an amicable resolution to this issue. Furthermore, this resolution should have no impact on Milton taxpayers and will finally put this issue behind us.
I look forward to representing you and your concerns in Montpelier. Please feel free to contact me if you have any questions, comments or concerns. I am very interested in hearing from you. During the session, I can be reached at the Statehouse by calling 1-800-322-5616 or by cell at 373-5960. My email address is My web-site address Thank you and have a great week.
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