Turner on audit: 'Outrageous'
Reps deny Salmon's TIF report, say taxpayers won't pay a dime

By COURTNEY LAMDIN | Staff Writer
courtney@miltonindependent.com

Despite all the uncertainties surrounding State Auditor Tom Salmon’s damaging report on Milton’s tax increment financing districts, one thing is for sure: Milton’s state representatives aren’t going to let this audit spell higher taxes for Milton residents.

Minority Leader Don Turner and Rep. Ron Hubert join the growing chorus of Milton officials who disagree wholeheartedly with Salmon’s findings, released last week, that say the town owes $3.4 million in back state education taxes.

If the town paid back those revenues, it would add 2 cents to the tax rate. That’s about $50 more on the average tax bill, Town Manager Brian Palaia said.

And that’s unacceptable, Turner and Hubert said.

“To hold the town of Milton accountable for that kind of money – it’s outrageous,” Turner said. “It’s an economic development tool. It’s worked. It’s worked in Milton.”

Turner and Hubert said the Catamount Industrial Park would not be as large as it is today without the TIF districts. The fallow cornfield that is now home to Husky would probably still be an empty pasture.

Though Husky didn’t live up to what it promised back in 1998 (see background on Milton’s TIFs here), both reps and Palaia agree the TIFs have done much for the town by way of growth.

And in a state not known for being an economic development engine, that’s saying a lot.

Simplifying statutes

Since Don Turner started his legislative career in 2006, he’s spent a lot of time changing and clarifying TIF legislation. Hubert estimates the statutes have undergone at least four modifications since passing in 1985.

If Salmon’s report signals anything to Milton’s delegation, it’s that it’s time for another wordsmithing.

Turner and Hubert aim to clarify the TIF language to make it understandable and consistent for all towns with TIFs.

“We have to get this so that it can be regulated and looked at in a common sense and concise manner,” Hubert said.

And right now, TIF legislation is anything but.

“TIF districts in themselves are a strange animal and very tough to figure out and follow,” Hubert said.

Vermont has eight TIFs, and four towns will be audited this go-around: Newport, Milton, Burlington and Winooski.

Newport’s report came out in June 2011, saying it owes $81,600 because it miscalculated the amount of state tax it could keep – the same conclusion drawn in the Milton report.

Though Milton’s tab makes Newport’s look like pennies, that two out of four audited TIFs were cited for the same error is significant.

“If there is something in the legislation that needs to be fixed, then we should do it,” Turner said. “But it has to be talked about.”

Hubert and Turner have already met with members of the legislature, including House Speaker Shap Smith (D-Morristown) and a Chittenden County senator.

Even though TIFs are controversial – some lawmakers see them as robbing the Ed Fund, and Salmon’s report will only confirm their suspicions – Turner thinks Milton has allies in addressing this issue.

Vermont doesn’t have many economic development tools, Turner said, and towns that have TIFs have seen undeniable growth, like Winooski and Burlington.

“It’s going to be very difficult for this state to really try to push this issue to get this money,” Turner said. “When they – the agencies that represent the state – have been involved with this from Day One, I don’t know how you can come back and say, ‘Well, Milton, you really screwed it up.’”

Hubert agreed, noting the law that tax return audits can only go back seven years.

“Why are we going back 13 years in the town of Milton?” he asked. “Federal law says seven, state law says seven, and I don’t understand why the TIF is not applied in the same fashion.”

Confusing legislation

Despite all the disagreements in this TIF debate, both parties agree the other misunderstood the laws that govern TIF districts.

Palaia thinks Salmon applied the latest legislation backward and didn’t consider the previous laws in his calculation. This idea was discussed at the town’s legislative breakfast in mid-December. The town received the draft report and discussed it with some lawmakers.

“It’s really hard to change the law and make it retroactive and fix the problem,” said. Sen. Ginny Lyons (D-Chittenden), “but if the legislature sees this as a problem, it sounds like it’s not a good thing. I was going to say ridiculous, but it’s probably not. [It’s] probably a progression of legislation.”

Hubert, who was on a committee to plan for the Husky plant, said that TIF was likely rushed in without “dotting the I’s and crossing the T’s.”

Salmon took some of the fault from Milton, saying there wasn’t sufficient state oversight when TIF district legislation was first passed. He also noted that Act 60 complicated the process.

“The legislature allowed Milton to be involved in a multimillion dollar program and did not provide sufficient guidance,” he said.

Salmon stood by his interpretation of the statutes but agreed there should be uniform rules for all communities, instead of all the exceptions written in now. He said his office consulted with the attorney general multiple times for clarification and noted his some of his staff have more than 20 years’ experience in auditing.

“We did not take this lightly,” he said, adding, “The ability for Milton to create evidence for their decisions based on statutes was difficult for them.”

Hubert and Turner, however, are confident the town followed the rules and are looking forward to discussing TIF and clearing up its imperfections this session.

Until then, Hubert cautioned taxpayers not to worry.

“This isn’t actually a bill; it’s a report,” he said. “What happens with that report at this point forward is the important part.”

If taxpayers have questions about TIF districts, Hubert, Turner and Palaia recommended they call the Vermont Economic Progress Council, the recognized state expert on TIF districts and the organization that approves and reviews TIF plans. That office phone number is 828-5256.

Read more on TIF districts:

Audit: Town owes $3.4M
What are TIF districts?
Where are Milton's TIF districts?