Well my last serious post before X-Mas....
The issue of Tax Abatements has come up over and over again at City Commisson meetings. Its true in the ideal world there would be no need for them and everyone would pay their fair share all the time. In this awful economic climate, its important to remain competitive. In our case the City of Vineland has used Tax Abatements to bring in the Cumberland Mall and its been stated by Vineland officals that they will continue to use tax abatements as a tool for economic development. I think it would be foolhardy to drop our Tax Abatement while Vineland keeps using them. Guess where some businesses would move?? I decided to find out some information on the hard numbers:
The term is PILOT. or Payment in Lieu of Taxes Over the 5 year PILOT for the 10 business the City will collect $14,967.81 more than if the business were paying full taxes. Plus the owner of the land will be paying full taxes on the land
Furthermore I found that over the 5 years the city collects $14,967 more than if it were on the tax rolls. The city also collected $47,288 in added assessments for 2008 before the PILOT starts in 2009. Also a Farmland Assessment (Abatement) saved a city resident $229,025.78 in taxes in 2008. This person paid $7,574.60 on 458.24 acres in 2008. If the land was fully assessed this resident would pay $236,600.38.
This person has opposed any tax abatements for businesses in Millville!!
In today's News of Cumberland County, a business owner
" Lester Didomenico, whose Finish Line Auto Repair shop submitted one of the 10 applications approved on first reading Tuesday, said the practice is necessary.
"I am here, in this city, because of a tax abatement," he said. "It allows me to stay in Millville; it means I get to stay in business."
4 comments:
"But it is unfair to single out certain businesses for the tax abatements and not offer them to others"
Who said that? The same person that unfairly gets a farmland tax abatement that EVERY other taxpayer has to subsidize!
He is nothing but a hypocrite! If he had ANY principles, if he REALLY believed what he was saying, he would live and lead by example!
His example is that he is ENTITLED to taxpayer subsidized tax breaks, but nobody else is. Not even when these abatements provide jobs. Not even when these abatements bring more into the city's coffers in the long run.
I can definitely see the benefit in Tax Abatements especially if they are used to attract the right kind of businesses we are looking for Downtown. Here is an example: If a tax abatement is offered to a popular store like Barnes & Noble and they agree to set up shop downtown, then the city will receive more money in the long run with the jobs that were created, the additional foot traffic and the added appeal of the area.
Once the abatement period ends then the city would really make out when the business pays full taxes.
According to the Literature on the subject of tax abatements three things must be present in order for them to work:
1) Tax Rates really affect a business's decision to locate in Millville.
2) Abatements are used selectively to attract businesses that will increase foot traffic and would otherwise relocate somewhere else.
3) Their use does not cause a rise in overall property taxes for non-abated property.
The abatement incentive must be conditioned with performance of the business and whether it offers the same wage or better wages for its employees.
Additionally, and this is real important, the City needs to keep records of the cost-benefit analysis of its abatement policy.
Interesting..
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