Tax Increment Financing (TIF)
Tax increment financing provides municipalities with a local tool to
finance the cost of private development. Maine municipalities may redirect
some or all of the new property taxes from an investment project within a
designated district to assist in that project's financing. Municipalities
have three disbursement options for the tax increment:
•
Give directly to the investing business to pay project costs.
•
Use to retire bonds issued as part of the project.
•
Retain for allowable economic development.
•
TIF districts may be designated for up to 30 years. Bonds may be issued for up to 20 years. Financing terms are determined by the municipality. Community designation of a TIF district requires proper public notice, a public hearing, and a majority vote of the municipal legislative body.
