Portland considers tightening TIF agreements
Portland’s City Council will be taking a closer look at the city’s tax increment financing practices, with an eye toward capping at 50% the amount of tax revenue that could be returned to developers and shortening the time frame of the tax breaks to 10 to 15 years instead of the current 30 years.
According to the Portland Press Herald, the proposed TIF policy would try to cluster the tax breaks in "priority areas" and require annual reports on the status of existing agreements. Under the typical TIF agreement, a percentage of property-tax revenue from new development is returned to the developer to offset the cost of the project or for some agreed-upon purpose. But, as TIF use has grown in Portland and elsewhere, critics have charged that the agreements have evolved into giveaways to developers that really don’t need the tax break and would undertake their projects regardless.
The Press Herald reported that since Portland’s first TIF was approved in 1994, the city has returned more than $18 million in tax revenue to developers. Under its existing agreements, the city will return an estimated $65 million to developers over the next 30 years. By comparison, according to the newspaper, Portland property owners pay about $140 million in taxes every year.
Recent TIF agreements, according to the newspaper, include a 30-year, $31 million TIF for the Thompson's Point Development Co. and a $2.9 million TIF to renovate the Cumberland Cold Storage building on the waterfront for the city's largest law firm, Pierce Atwood.
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