Tax Increment Financing (TIF)

A Municipal Tax Increment Financing (MTIF) District is an economic development tool authorized under Maine law that allows a municipality to capture and reinvest a portion of new property tax revenue generated by development within a defined area.

When an MTIF is established, the existing assessed value in the district is set as a baseline, and only the taxes from new value created after designation are set aside for a limited time to fund public improvements such as roads, utilities, stormwater infrastructure, housing, and transportation safety.

A MTIF does not raise taxes or divert existing revenue; instead, it helps ensure that growth helps pay for the infrastructure and public investments needed to support it, while strengthening the local tax base over time.

Municipal Tax Increment Financing (TIF) is a flexible finance tool used by municipalities to leverage new property taxes generated by a specific project or projects within a defined geographic district. Any portion of the new taxes may be used to finance public or private projects for a defined statutorily allowable period of time.

The TIF Program is locally driven: The municipality defines the district size, determines the amount of new taxes to be captured, identifies allowable public and private projects along with the term, with the whole proposal requiring local political approval.

A business may approach a municipality with a project for which a TIF district would provide financing. Or a municipality may take advantage of an already planned and financed project and create a TIF district around it, capturing a portion of new property tax revenue for specific public uses.

Over their term, TIF districts can return thousands to millions of dollars to a municipality. The projects financed may include anything from upgrading a road to adding a wing to an existing building or more.

In the City of Gardiner, applications for tax increment financing will be considered for all areas zoned for commercial or affordable housing development in an effort to build community and economic growth through public-private partnerships with both existing and new businesses.