APRIL 9, 2011
JOBS AND ECONOMIC GROWTH
CONTACT: BRUCE J. SIMPSON
In an effort to revitalize both our economy as well as our areas that have fallen into a "blighted" status, Simpson is recommending the use of LERTA (Local Economic Revitalization Tax Assistance Act) as a tool for achieving the above goals.
A major obstacle for business has always been that improvements both minor and major to their physical structures increases the value of the property and would or could lead to increased taxes being levied on the property at a time that they might not be able to afford it. LERTA allows local taxing entities under authority of Article VIII, Section 2(b)(iii) of the Constitution of the Commonwealth of Pennsylvania, to provide tax assistance in the following form:
"This act allows local taxing authorities to exempt improvement to business property IF SUCH PROPETY IS LOCATED IN A DETERIORATINAG AREA AS DETERMINED BY A MUNICIPAL GOVERNING BODY or is subject to a governmental order requiring the property to be vacated, condemned or demolished by reason of noncompliance with law, ordinance, or regulations.
Improvements eligible for tax exemption include, repair, construction, or reconstruction including alteration and additions having the effect of rehabilitating a structure so that it become habitable or acquires higher standards of safety, health, economic use or amenity, or is brought into compliance with governing laws, ordinances, or regulations." Tax exemption may be based on actual costs of the improvement or renovation, or a graduated tax increase each year for a maximum of ten years when the business would pay the full tax levied by the taxing authority from then on.
This program offers the County and municipalities a unique tool to encourage the revitalization of areas that are now producing little if any tax revenue and no jobs. With revitalized buildings, companies will reopen and employ people in need of jobs. If the owner of a building is interested in revitalizing a building they own, but not to reopen a business, they would be urged to put the building on the rental market for a company to move into.
Luzerne County would have to engage in a robust working arrangement with the various Chambers of Business and commerce to recruit outside companies to move into Luzerne County and create the badly needed jobs. How many buildings that now stand empty could house a call center? Hilton International closed their call center in Hazleton, laying off almost 140 employees and shipped the jobs overseas. Other companies have decided to locate their call centers here in Luzerne and a concerted effort can be made to attract new call centers into the area using various means.
Manufacturing jobs might be added to the county to manufacture the various parts for the wind turbine industry. One company is already operating in this field in Luzerne, why can't we bring in more of this type of job? Solar panel manufacturing plants would be another excellent industry to bring into the county.
A second program that might benefit the County is called PILOT (Payment in Lieu of Taxes) which essentially asks tax exempt organizations to make a voluntary payment to the County in recognition that they are legally exempt from taxes, but still benefit from municipal services. Any exempt organization including churches of all denominations can be asked to contribute in these tough times when funding is so badly needed to meet the requirements of government. They of course can say no, but the County should at least make the attempt to get voluntary donations while maintaining the integrity of their exempt status.
Luzerne County is currently engaged in these programs but increased use can and should be sought. Additionally KOZ, or Keystone Opportunity Zones need to be more vigorously promoted by the County in order to continue to add one more avenue for increased industry and jobs.