| || |
Jump on this!
August 11, 2012 - John Stack
On August 8th, Jessica Collier wrote an article in the ADE about a potential biofuel plant being located in Tupper Lake. This was related through John Tubbs of the Franklin County IDA. This is exactly what the IDA should be using our economic growth tax exemptions for. This facility would be a great economic boon for the area. This type of facility would have many economic benefits. Direct benefits would be for the building of this facility. Regardless if local workers or not build it, these workers will be using local restaurants, hotels, etc. Once built, it would employ many locals, which would in turn be using local retail establishments, and helping with the local tax base and housing stock. This facility would also help to jump start the local logging economy. This is the major reason this unnamed company wants to locate here – the availability of wood. Getting this company to locate here is a win win seemingly for everyone.
What about property taxes? John Tubbs is involved because his agency would be in charge of creating the property tax exemption – in the form of a Payment In Lieu Of Taxes – or PILOT. A PILOT will not end up paying going rates (typically) for the life of the PILOT. The promise of a PILOT is more jobs, more economic activity, etc than would have occurred had the place not built there. PILOTs usually run 10 years, but can run 15,20 or 30 years. Some PILOTs are structured in a way that they pay approximately what the property taxes would be had the business not been in the PILOT, but the company gets other tax breaks by paying their taxes this way. Others though pay a fraction of the property taxes they would have paid had they been fully taxable. Many places have been burned, or feel they have been burned, by overzealous use of IDA property tax exemption use. The Syracuse Destiny USA Malll (previously known as Carousel Mall) is for many a cautionary tale about poorly negotiated property tax exemptions. This is a huge mall in Syracuse that pays very little in taxes at all compared to what they would fully taxable. Promises have not been met and to many, it seems like a colossal boondoggle that seems to only benefit the owners of the mall. Here is the crux of that whole matter – Would the mall have been built anyway – without the extremely generous tax abatements? Could the tax incentives have been more beneficial to the local taxing jurisdictions? Does the added employment and sales tax revenue trump the loss of property tax revenue? Companies locate for certain reasons. Businesses like the new Hampton Inn going up in Lake Placid locate there because that’s where the people are who want a hotel (and it is incredibly well situated). That is one that doesn’t need a PILOT. It would have been built regardless of incentives, so Lake Placid, North Elba and the other taxing jurisdictions should benefit without having to lose taxable value (I don’t know if they have a PILOT, but they shouldn’t). The Hampton Inn isn’t going to decide to locate elsewhere, because there is NO elsewhere as good as where they are locating.
This biofuel plant is a different story. Tupper holds nothing over just their direct neighbors. Long Lake to the South is in Hamilton County, and Piercefield to the West is in St Lawrence County, not to mention who knows what other towns are in the running. I would make the prediction that without significant incentives from Tupper/Franklin County IDA – they will go elsewhere. It seems to me the cost/benefit of locating the plant here weighs very heavily in the side of significantly higher benefits than costs. This is the exact type of business that IDA’s are designed for. I say to Mr Tubbs – do what you can to get this facility. The Franklin taxpayers should be strongly at your side.
No comments posted for this article.
Post a Comment
News, Blogs & Events Web