Flushing sprawl down the drain : is TIF an option for Vermont growth center wastewater projects?

Abstract

In keeping with a long history of striving to preserve its traditional settlement pattern and promote smart growth, Vermont's most recent growth management policies encourage municipalities to plan for and accommodate development in dense, mixed-use growth centers. However, concentrating development in this manner requires a level of wastewater treatment capacity that is absent in a majority of Vermont municipalities and in nearly half of Vermont's existing designated village centers. It is certainly true that wastewater treatment capacity is neither the only nor the most critical barrier to implementing the growth center concept in Vermont. Nonetheless, it is an obstacle that Vermont must address if it wishes to see its smart growth goals fulfilled statewide, including in unsewered towns that are experiencing development pressure and need to increase their wastewater treatment capacity to accommodate such development in their growth centers. The State is currently developing a publication and trainings to educate local decision-makers about wastewater treatment problems and the range of possible conventional and alternative solutions.

(cont.) This outreach effort will definitely help unsewered towns to better understand their wastewater treatment needs and to find the most innovative and economical wastewater management solutions for their given situation. However, sufficiently addressing the wastewater barrier to smart growth in Vermont also necessitates tackling some of the difficulties inherent in financing these types of projects. Therefore, this thesis has attempted to spark a discussion in Vermont about the financing side of this planning dilemma by providing its readers with a better understanding of the funding realities of small community wastewater projects, as well as the revenue-generating mechanism known as tax increment financing (TIF), which has been proposed in Vermont as one way to help towns fund their growth center wastewater infrastructure projects. The research from this thesis indicates that although using TIF is plausible in theory in this context, employing TIF seems to be neither practical nor suitable for growth center wastewater projects in unsewered towns. However, the TIF concept can still be applied at the local level for these types of projects using routine municipal tax revenue. In addition, this thesis suggests several ways the State can assist unsewered municipalities in addressing the challenges they face in financing their growth center wastewater projects.