ROCKLAND — They are called TIFs, the acronym for tax increment financing. In a special meeting of the Rockland City Council, Monday, Sept. 23, in Council Chambers at City Hall, councilors read through pages of updates for both the Fisher and Tillson TIF districts. After two hours of discussion, they postponed enacting the amendments to Oct. 16, for the Fisher TIF and Nov. 13, for the Tillson TIF.

“The biggest thing to get out of this tonight is for people not to think that this is a tax break for business, because it isn’t,” said Rockland City Mayor Will Clayton, at the Sept. 23 meeting. “We are capturing the same amount of tax revenue. I have a great time when people ask me what a TIF is; they don’t really understand it. They hear TIF and they hear tax break for business, or big store and they are not going to pay their dues. It’s just a way to help reward businesses who, in turn, are going to reward the city.”

A TIF is the ability for business and government to work for each other, he said.

The best definition of TIFs comes from a 1997 article by the Maine Municipal Association:

"The mechanics of a TIF program have remained the same since its legislative adoption. Basically, a municipality designates a Municipal Development District (intended for blighted areas or sections of a community in need of redevelopment) where development will occur and tax increment financing will be used to assist that development. Property values within the "district" are frozen. When improvement are made within the district and value increases, the difference between the frozen value and the new value is called the "captured value". Property taxes generated by that captured value are used to support the development project.

"Two major changes have occurred to the TIF program that have increased municipal interest in it. One change, in the mid-1980's, excluded the "captured value" from state valuation, thereby sheltering the municipality from reduced state aid in programs such as General Purpose Aid to Education and State-Municipal Revenue Sharing. The second change was an amendment to the TIF statute in 1993 allowing credit enhancement agreements (CEAs).

"Credit enhancement agreements permit the ‘captured’ property tax dollars to be channeled directly to the business doing the development. The money must be used for the project but the business is given considerable latitude in its use of these funds, unless stipulated otherwise by the municipality."

According to Rockland’s background material, the approved a TIF district in 2009 in collaboration with Douglas Dynamics LLC. That TIF is officially known as the Fisher Engineering Plant Expansion Tax Increment Financing District and Development Program. A proposed amendment now before the council is to add eight acres to the district that is owned by the city that lies within the Rockland Industrial Park.

The goal is to allow the city to add more projects that may be funded from any municipal TIF revenues.

The second TIF under consideration for amendments is the Tillson Redevelopment Tax Increment Financing District, which was approved in 2008. The goal of that amendment is to include new uses of municipal TIF revenues and extend the life of the TIF for 30 years.

“What they are saying is that the Tax Increment Finance procedure is much more favorable for the first half of the life of the TIF to business and much more favorable to the city in the back end,” said Clayton. “The one we just did for Fisher is a 10-year term. They wanted to bring in new jobs and create a new piece of their business. They might not have done that and put that money into it without the benefit of getting some of that money back in taxes the first couple of years. And now on the back end we’re getting more as a municipality then what we normally would.”

The city was approached by Fisher, said Clayton. “They had this plan on how much money they would spend, how many people they would bring into the area and the increase in taxes,” he said. “And then on the other side we have the Tillson TIF, which is basically a blank slate back there and we want to encourage people to come in. And this is one of the ways we do that.”

Clayton said that TIFs are vital for economic growth. The amended district encompasses approximately 89 acres, the city estimates. The amendment also pushes the life of the TIF to its maximum, a 30- year span.

“They are not for every community,” he said. “A place such asRockland, where we are a service center, we need to get as much tax revenue as we can. We have roughly 25 percent tax-exempt properties. That is an insane amount for only 7,500 residents; but the workforce is over 20,000. We need to encourage as many tax generating businesses and entities as possible and this is one of the ways to do it, so it definitely works for us.”

The downtown TIF amendment is to support additional community developments by addressing any blight conditions and continued overall improvement to the look and image of the downtown, the city said in its TIF documents. Additional goals are to improve the marketing of the downtown, create a downtown that continues to attract visitors and serves local residents, and to finance public infrastructure improvements.