By Jonathan P. LaBonté
Mayor of Auburn
In the next month, movement will begin on developing the 2017-18 city budget. As I highlighted last week, there are already some challenges we will face with growing expenses from other areas of the city and likely more that we have yet to be briefed up.
And while cutting expenses and prioritizing spending will be central to this budget, we cannot lose focus on a key way to hold the line on taxes and reduce them over time: economic growth.
There are lots of ways to measure economic growth; well-compensated consultants and “experts” will happily provide presentation upon presentation about what it means and how you do it. Are you focusing on job creation, on growing wages, on companies relocating or expanding in your city?
Each of those measures are important and have a place in a broader, regional discussion about economic competitiveness. And by region I don’t mean Lewiston-Auburn, since we are part of a much larger Southern Maine region that seeks to compete with other parts of the country and world for capital and talent.
The forces that determine if Southern Maine can compete are predominantly decided in Augusta, where we should all hope efforts will not leave our state with the second-highest income tax in the country.
So which measure of economic growth impacts our City of Auburn budget? Real estate investment. At the end of the day, the city’s dominant form of revenue is from taxes on the value of property. To hold the line on taxes, and ultimately cut them, you need to generate more real estate value.
There are a couple of activities happening this month that could help us move more aggressively in this direction, and it will require the city council’s votes to do that.
The first is a discussion on what to do with city-owned property. For years, the city has acquired property a number of ways. We have acquired and torn down condemned buildings; others we have tax-acquired; and still others were bought with some strategic purpose in mind. The challenge is that there is no solid documentation of those past city council actions or management decisions to determine if the city owning property, and in turn not collecting taxes, is the best way to advance the city’s growth.
The Auburn City Council will begin a review of city-owned properties first in the in-town neighborhoods around Hampshire Street, in New Auburn and downtown. Based on discussion about city-adopted policies for long-term use of land, it is clear that a number of properties will be made available for developers to make proposals. This is where strong direction will be key.
If the city is to sell property, we should be seeking a new owner that will provide the most taxable value over time, which means constructing buildings. If such a proposal doesn’t come forward, we should not just sell properties to collect taxes on the vacant land.
These three neighborhoods offer the city the opportunity to provide small incentives to people that may choose to invest, because they are part of the Community Development Block Grant area, where targeted federal grants to the city make it possible.
At the same time we prepare to list properties for potential investment, we will also be hosting two roundtable discussions to learn more opportunities and challenges to real estate investment in Auburn. One will focus on larger developments of properties for residential, commercial or industrial use and the financiers of such projects. Better understanding how those in the market view Auburn to invest is important for how we set policy to attract and retain investment.
The second will be with owners of small properties, such as multi-family apartments. The city is often perceived as providing incentives to the “big guys” at the expense of the “little guy.” This will be a chance to hear firsthand from landlords about what they see as challenges to owning and managing
properties and what might improve the climate for their investments.
If anyone reading this would like more details on either roundtable or has ideas on ways to encourage real estate investment in your neighborhood of Auburn or citywide, please reach out. You can contact me at email@example.com.