Newport Council Votes to Join Consortium Pushing State to Lift TIF Cap

The Newport City Council voted Monday to join a regional consortium seeking to lift or loosen the state cap on Tax Increment Financing districts and authorized a contract with consultant David White to lead lobbying efforts.

David White, a Vermont redevelopment consultant who said his firm helped establish several of the state’s existing TIF districts, told the council that TIFs let a municipality retain a portion of “incremental” tax revenue generated inside a designated zone to pay debt service for infrastructure projects. “TIF districts allow a community to invest in a particular economic development area without costing existing taxpayers any money,” White said during a phone presentation. He described the typical structure in Vermont as using 75 percent of the new incremental taxes for debt service for up to 20 years, with the remainder flowing to the education and municipal funds.

The council’s vote authorizes Newport to participate in a consortium of municipalities seeking a legislative change to the statute that currently limits the number of state-authorized TIF districts. White said recent practice and the arrival of several municipalities had created a backlog; his ask was modest: a $5,000 flat fee from each community to cover lobbying materials and his time to coordinate the effort. White said the $5,000 is strictly for lobbying to remove or raise the cap; the later, more substantial cost of setting up a local TIF district would come later and could run into the tens of thousands.

Regional development officials signaled local backing. Dave Snedeker of the Northeast Kingdom Regional Development Corporation (NVDA) told the council NVDA would prioritize the effort and work alongside White and municipal delegations to press the legislature. Local legislators in the room urged a broad, multi-community approach to win committee votes in Montpelier.

Council members asked whether joining the consortium would lock Newport into a TIF project. White and staff emphasized the distinction between the legislative advocacy (joining the push to lift the cap) and a later local decision to set up a TIF district. The council’s consent Tuesday was limited to participation in the consortium and contracting White to represent Newport in Montpelier.

The council discussed a funding source for the $5,000 fee: city officials noted a $100,000 Walmart downtown grant set aside for economic development and agreed to draw $5,000 from those funds to pay White’s fee. Following a motion by Mr. Morrissette and a second by Mr. Vincent, the council voted orally in favor and the motion carried.

What happens next: White said he will work with City Manager Laura Dobin and local legislators to assemble materials and brief legislative committees; NVDA also said it would prioritize the item. If the legislature lifts or changes the cap, Newport would still need to decide in a separate local process whether to pursue and, if so, to design a TIF district and later seek voter approval for any bond financing required.

Note: The presentation described the existing statutory process and local examples; council members raised the practical timing constraints that come with the five-year window municipalities have, once authorized, to incur initial debt in a newly established TIF district.