We have written a great deal about Ashland's economic problems and discussed some of the ways that we can deal with these problems. The town cannot expect to resolve these problems by placing the entire burden on residential tax payers. We need sustainable economic development. Tax Increment Financing (TIF) is one way for towns to encourage economic development and fund necessary infrastructure improvements without increasing the tax burden. A number of cities and towns in New Hampshire and in other states have already used TIFs successfully to improve their downtown areas, historic districts, and business parks.
TIF is the financing of public improvements with the incremental taxes created by new construction, expansion, or renovation within a defined section of a community. Say that the town of Ashland voted to create a TIF district in the downtown and mill area, and a business owner in that district renovated the building. The tax increase from the renovation could then be used to make public improvements in that area. The taxes originally paid on that building would still be distributed as they are now between then town, school district, and county.
Towns in New Hampshire have used TIFs to pay off bonds and to create "savings accounts" to pay for public improvements, and in conjunction with grants and other sources of funding. There are number of improvements that need to be made to the downtown that could be funded using a TIF. The repair of the Fire Station Roof, replacement of the water pipes, addition of parking spaces, and several of the ideas from the Charrette. Businesses and home owners in a TIF district benefit because money they spend to improve their property gets reinvested in their district. A TIF can also be used to attract new business because it can be used to finance infrastructure that a new businesses would need to locate in Ashland.
A TIF is not a silver bullet that will solve our economic problems. It is only a tool that can be used if the town can develop the right opportunities. It requires that we have the right expertise in terms of planning, budgeting, economic development, accounting, and leadership to develop effective partnerships with businesses and developers. It requires a great deal of work as well as commitment from the town. But, it could prove the be a great help in revitalizing the downtown and bringing new business into the mill area.
For more information on TIF, see the following links:
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