Basically all school districts come up with a yearly budget. Part of that budget is paid for by the state and part is paid for by the towns according to how much each town is worth (by state valuation). If you total all the school district's town's valuations up, your town will be worth 10%, or 20% or 30% (or some percentage) of that total. That percentage is what your town has to pay of the local share of the school's budget. If you TIF a project, you get to hide your increased town valuation from the school district and all the other towns don't get a little reduction in their school taxes that they should have got through standard taxation. It makes the other towns angry because you chose to not share your "good fortune" and it's costing them money.
Below is something I wrote up for Jackson earlier. Hope it helps.
11-10-2009 by Tom Olds (Jackson resident)
What’s a TIF mean for Jackson (or any other town) and why should you care?
What happens to your taxes if Jackson gets some wind turbines and would a TIF agreement with the wind companies help or hurt your annual tax bill?
So far, all wind projects in Maine have been TIF’d. Mars Hill, Stetson, Lincoln, Lee, Winn, and Oakfield have all negotiated TIF’s with the Wind Companies. Now Freedom, and possibly Vinalhaven, is getting closer to a TIF agreement.
Let’s say we are going to put in eight turbines (a $24,000,000.project) and we don’t agree to a TIF. Our mill rate falls from .02065 to .01209 and things look great for two + years until the state re-evaluates the town (they are always two years behind and the school district is three years behind). Because of the new, much higher town value, the state reduces our municipal revenue sharing, the school district raises our share of the school budget and the county does the same. Now our mill rate jumps back up to almost what it was in the first place before the turbines. The other towns in the county and our school district are happy, because their taxes go down a little bit because Jackson is paying a larger percentage of the school and county budget.
We should be paying more, because our town is worth more. That’s the way it works. At least we had two+ good years!
A TIF agreement “shields” our wind project value from the state, the school district and the county, so our taxes don’t go up (they don’t go down either). The annual mill rate is figured like it always is, however the Wind Companies pay Jackson some money every year because of the TIF agreement. How much do we get every year?
It’s fairly easy to figure. Take our present mill rate (.02065), times the value of the wind project, say $24,000,000 (eight turbines times three million each is $24,000,000.) and we come up with $495,600. Out of that $495,600. we get to keep 40%, or $198,240. and the Wind Companies put the rest ($297,360.) back in their pockets. That’s what we get the first year, but because the turbines are depreciated 2% each year, by year 21 we only get $132,424. There is a catch though. We can’t use the money to give back to our citizens in the form of tax relief, we have to spend it on state approved “economic development projects”.
The risk we take if we go the TIF route is making all the other towns in our school district very angry because they have to make up for the lost school revenue ($225,154. each year) our TIF is causing. Already the other towns in SAD 3 are looking into ways of not honoring our TIF, and if they find a way, our personal taxes could jump by a third. Don't forget that if we sign a TIF with the wind company, there is no chance to renegotiate, and we won't be able to use our TIF proceeds to pay the school district because the state wouldn't allow it. There would be blood in the streets!
Freedom was not TIF’d, making it the only turbine project in the whole state that is not TIF’d. Vinalhaven was TIF’d with the development company keeping 90% and giving just 10% to the town. In all fairness to the development company on Vinalhaven, the electrical company is a co-op, so that had something to do with it, but there was $5,000,000 or so private money involved too. So how the 90% was split up, I don’t know.
Lincoln negotiated a 50-50 split with First Wind and the same goes for Burlington.
In a LURC district such as Stetson, I believe the county kept 40% and First Wind pocketed the standard 60%.
Most of the TIF agreements have a section called "Tax Shift" section. This is the section where the wind company's lawyers (Eaton Peabody does a lot of them) try to tell your town how much you will save in taxes (school and county) if you TIF their project. But what they don't tell you, is that 60% of those savings will be theirs. Sign here!
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."