In this last article before the October 7th TIF bond vote, the Task Force thought it would be helpful to revisit some of the most frequently asked questions. Starting with what this bond is for and why it matters, to a refresher on what TIF is and how it works, our aim is to make sure you feel confident about your vote.
What Is the October 7th Bond For?
The first project vetted and approved by the Vermont Economic Progress Council (VEPC) is for the infrastructure upgrades that will support the hotel, which will occupy the ‘pit’. This bond will cover the following projects:
- Install new water mains on Wales Street
- Install new sewer main, new water main, and new stormwater main on Center Street
- Bury electrical and communication conduits below ground on Wales Street
- Replace sidewalks on Center, Wales and Willow Streets
- Streetscape improvements on Center Street from Wales Street to Merchant’s Row
Why Is This So Important Now?
It is no surprise that our infrastructure is aging and rapidly failing. One needs only to view the September 10th, 2025 WCAX news story about our DPW crew pulling a 100-foot root cluster from a stormwater pipe to see that updates to these systems are desperately needed. Moreover, Rutland City needs to do something to reinvigorate the downtown, boost the local economy, and restore and create housing.
It’s Rutland’s time—and it’s Rutland’s turn. It’s time for the City to invest in itself, to return to its position as an economic powerhouse for the state, to be a destination for visitors from all over the northeast and beyond, and to be an attractive place where people can comfortably live, work, and play.
Beyond the improved infrastructure that we know we’ll all benefit from, this is what a new hotel in the downtown core of the City means:
- A boost for our world class restaurants, theaters, shops, and area attractions
- New jobs and long-term investment
- Stronger tax base to support city services
- A visible sign that Rutland is open for business and opportunity
Communities like St. Albans, White River Junction, and Killington have enjoyed the benefits of TIF. It’s Rutland’s turn to do the same.
What Is Tax Increment Financing (TIF)?
TIF is an economic development and financing tool that, without raising property taxes, enables communities to correct, repair, and build infrastructure in support of a planned and state-vetted development project within a defined area. Requiring rigorous review and approval by VEPC, proposals for TIF Districts must meet specific criteria to prove that development would not otherwise occur if not for the benefits of TIF.
For developers looking to build new housing, a hotel, mixed use buildings, or other projects, their work could be impeded by crumbling infrastructure. These could be insufficient or deteriorating water or wastewater utilities, inadequate parking, failed stormwater systems, brownfields/site contamination, and other similar limitations. Not all developers, though, can afford to fix these problems before they break ground. And that’s where the City needs to step in.
In a typical scenario, if infrastructure improvements were needed, a City would ask voters to approve of a bond to cover the expense. That bond would be paid for by increased property taxes, or by increased utility bills. That is not the case with TIF. Since the City went through the rigorous approval process through VEPC to create a TIF District, and because there is a development project (the hotel) ready to proceed once the infrastructure issues are resolved, the bond payment does not fall to the taxpayers; instead, it is paid for by the development project itself.
How Does The Bond Payment Work?
The taxable value of the property that is being developed will go up because they are building new value. The bond is paid back using the difference (or, the ‘tax increment’) between the pre-development and post-development value of the property.
It is important to note three key things:
- The amount of taxes that currently flow to the general Municipal Fund and the Education Fund will not change. These will continue to flow as they do now.
- The “tax increment” that is created as a result of the development project will be split three ways: 15% of the municipal portion will flow to the General Fund, 30% of the state portion to the Education Fund, and the remainder will be retained in a TIF Fund, which will be used to pay off the bond.
- Leveraging TIF for these major infrastructure projects (that support planned development) make it so that the taxpayers do not see an increase in taxes.
What Happens If The Bond Doesn’t Pass?
The reality is, the underground—water, sewer, and stormwater—work will have to happen no matter what. And to do that work would require a bond, currently estimated at $4.4M. Since that would be a traditional bond, the cost would fall directly on local taxpayers. With the approval of the $3.9M bond on October 7th, there will be no change to the tax rate for the new infrastructure.
Finally, the Rutland City TIF Task Force would like to thank the Rutland Herald and The Mountain Times for allowing us to run these articles for the last several months. For a vote that is happening at an unusual time, our team had to get creative in spreading the word and we’re grateful to our local media for helping do just that. And for our readers, thank you for your thoughtful engagement; we hope these have been helpful.
For more information, visit the Rutland 360 website: https://www.rutlandvtbusiness.com/tax-increment-financing/ or email Ed Bove ([email protected])
About the Rutland City Task Force and Rutland 360. A collaborative initiative, Rutland 360 is led by the Rutland Redevelopment Authority, the City of Rutland, the Chamber & Economic Development of the Rutland Region, and the Downtown Rutland Partnership. Together, these stakeholders (known as the “Task Force”) have developed the Rutland City TIF District Master Plan, a strategic effort to drive economic growth and revitalization in our city.
