Saturday, June 10, 2006

Who Benefits From Abatements?

From the Jersey Journal:

It's time to stop tax abatements, but city loves 'em

Decade after decade, administration after administration, real estate developers in Jersey City have benefited from generous tax abatements - and in return, politicians have benefited from generous campaign checks.

The developers love these deals, not only because the amount paid in lieu of taxes (PILOTs) is generally lower than what they'd be assessed under conventional taxation, but also because - with a 20-, 30- or 40-year agreement in place - they're shielded from the uncertainty of the ever-rising tax bill.

And the city loves abatements because, unlike conventional taxes, the city gets to keep almost all the money: Very little is shared with the county, and nothing at all with the school board.
...
At the same time the city is raising property taxes 18 percent, the county wants to increase taxes on Jersey City residents by 9 percent. But perhaps the biggest payout is yet to come: Gov. Jon Corzine is making serious noises about requiring school districts under state control - that includes Jersey City - to contribute more to their school board budgets. Jersey City's school taxes have remained flat for over a decade, with the state contributing any increase it deemed necessary.
...
In fact, some even say they have no choice but to give abatements. Since they've given them in the past, it wouldn't be fair to not give them in the future.

The concern for millionaires and billionaires is touching. But wouldn't it be nice if they evinced similar compassion for the senior citizens and working stiffs just trying to hold onto their homes in the face of increased water, utility, gas and property tax rates?

2 Comments:

Blogger Metroplexual said...

PILOTS are used in all kinds of places not just cities. Where regional school district exist in the state, it is one of the tricks of the trade to "hide" ratables.

6/10/2006 10:26:00 AM  
Blogger Grim Ghost said...

There may be grounds for abatement programs when an area is badly in need of redevelopment.

But that time has long passed for JC. Now its the new hot spot for Manhattan yuppies buying 2M condos. Corzine is absolutely correct -- the state government should refuse to contribute more to JCs schools if JC itself isn't willing to raise taxes on its new properties.

6/10/2006 04:14:00 PM  

Post a Comment

<< Home