Partial Price Tag Put to Shell Exemptions

If the much-hyped cracker plant decides to put down roots in the Beaver County site that is a Keystone Opportunity Zone (KOZ) and if the company invests at least $1 billion in capital and creates at least 400 new full time jobs within seven years it will enjoy a tax-free existence for fifteen years. An article yesterday detailed a legislative hearing on the proposal and local officials were able to detail how much the exemptions would cost.

The annual total for the town and the school district would be a combined $315,000 annually based on the amount of real estate taxes collected on the facility on the site now. That’s $4.7 million over fifteen years. The totals rise when other taxes are added in, and the county (which also collects property taxes) did not have its share included in the calculations.

Much of the talk back from boosters of the project is sure to be along the lines of, sure, you have to give up tax dollars, but the benefits of the jobs, spinoffs, corollary development, etc. will far outweigh the foregone tax revenue. It was what was brought up when nearby Butler County, Cranberry, and Seneca Valley School District had to decide to buy in on the Westinghouse project, which was not a KOZ but a Strategic Development Zone project that likewise waived taxes for fifteen years. One company official told local officials in 2007 that "It’d be great if you didn’t have to do it, [but] it’s not the reality of today’s world. If a region wants to be competitive, you have to do it". Spirits are high now that the move has been completed in June and the new location has 3,500 employees that transferred from eastern Allegheny County. But time will tell if the exemptions there, and the ones planned for the Beaver site, will pay off.

Will Leased Parking Garages be a Tax Shelter?

Pittsburgh is contemplating a lease of its publicly owned parking to the high bidder for a sum of $452 million. The lease of nearly 18,000 spaces in garages or lots and on-street metered spots owned by the City of Pittsburgh and the Parking Authority, if consummated, will alter the concept of public property.

 

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