All aboard | A bill to create transit TIFs would pave the way for growth
“Charting the Course” is written by GrowSmart Maine, a Yarmouth nonprofit that promotes and encourages new ways of thinking about Maine’s future. This issue’s column is written by Christian McNeil, GrowSmart’s communications director.
One of the less-publicized bills that GrowSmart has been working on in Augusta this year is LD 1392, a bill that would authorize Maine’s cities and towns to create transit-oriented tax increment financing districts in order to simultaneously promote economic development and new transit services.
The bill would offer Maine communities new financial tools for financing bus service, passenger rail, park-and-ride lots, vanpools and other sustainable transportation services.
These services have come into high demand in the past five years. Conventional wisdom might hold that Maine, as a rural state, can’t support successful transit services. In reality, though, thousands of workers across the state rely on dozens of public transit services statewide, from Aroostook County’s ARTS buses to Berwick’s COAST bus, an interstate route that’s part of the greater Portsmouth, N.H., transit system.
Who’s riding
Transit services are in particularly high demand among younger, well-educated workers in the emergent “knowledge economy.” Just look at Google and Microsoft, which each operate a private fleet of dozens of buses to move their workers back and forth from their campuses to destinations throughout the San Francisco Bay area and metropolitan Seattle, respectively. For these workers, the ability to spend productive time on a bus, train or vanpool — as opposed to unproductive time spent behind a steering wheel — can make or break a decision about where they should live and work.
For other businesses, transit services expand the labor pool across wider areas, and reduced commuting costs can translate into reduced payroll expenses. New transit services have well-documented effects on income growth: In a 1998 survey of rural counties nationwide, the National Academies found that counties with transit systems had a net earnings growth rate that was 11% higher than in counties without transit systems.
Finally, transit connections help keep Maine’s communities vital as centers for culture, shopping, employment and tourism. Downtown areas and Main Streets served by transit have lower vacancy rates than town centers without transit, in part because transit increases disposable income and can deliver workers and shoppers to downtown districts without bringing the traffic, noise and pollution that stifles vitality. In fact, some of the largest real estate projects being built in Maine right now are adjacent to existing or planned train and bus stations in Saco, Freeport and Brunswick.
The transit TIF idea takes advantage of the fact that transit can stimulate economic growth in our towns and cities. Because new transit service can be a catalyst for new economic development, the bill would allow municipalities to utilize new property tax revenue from transit-oriented development to pay for new or improved transit services.
Invest in the future
As a purely hypothetical example, suppose Augusta and Waterville join together to plan a new commuter bus that connects major employers and their downtown areas. Each city might create new transit TIF districts around each stop, with revised zoning designed to facilitate more buildings and new development, and a promise to direct new tax revenue into transit infrastructure. Combined with state and federal funding, a single $5 million office development would generate more than enough new property tax revenue to pay for buses running every 20 minutes during commuting hours.
The concept has been championed by Tex Haeuser, South Portland’s planning and development director, who was frustrated at the lack of investment options for new transit services in the midst of last summer’s record-high gasoline prices. Haeuser has proposed a South Portland streetcar line to connect neighborhoods and encourage high-quality, walkable redevelopment alongside. South Portland is moving towards a more in-depth study of the concept, and the transit TIF legislation gives the city an important tool towards making the vision a reality.
But the new law is also designed to benefit small towns, especially in rural communities where rising gas prices have had particularly acute effects on residents with long commutes. For instance, a village or a small-town Main Street could invest in a new vanpool service to shuttle local workers to major employment centers. The new legislation would also allow municipalities to raise TIF revenue for sidewalks, bike paths and other infrastructure for sustainable modes of transportation within a neighborhood or village area.
Although transit ridership has grown considerably in the past five years, there have been few investments in new transit services. “Transportation providers around the state are challenged every day to meet the growing demand for transportation services in Maine,” says Maine Transit Association President Sara Trafton.
The transit TIF bill received a strong ought-to-pass vote in the Legislature’s taxation committee, and we expect a debate and vote from the full state House soon after this column goes to press. Check GrowSmart Maine’s “Charting Maine’s Future” blog — www.growsmartmaine.org/blog — for updates.
Christian McNeil can be reached at editorial@mainebiz.biz.
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