Dec 1, 2011

NIZ, A Study in Favoritism

Bernie O'Hare has an excellent post on the irony of Pennsylvania tightening it's belt and instituting a new give=away program at the same time. He writes;
According to State Senator Pat Browne, dwindling state revenues make these cuts necessary. "We have been in a trough, a serious trough," he laments to a reporter. What the good Senator fails to point out, however, is that he dug the hole about which he now so sadly complains. He helped draft legislation that gives major tax breaks to well-heeled entrepreneurs, so that those on the brink, can continue to suffer.
All in the name of hockey.
Back in 2009, Browne and State Rep. Jennifer Mann,..(wrote and had passed)- the "Neighborhood Improvement Zone." To be fair, that program is available for any local government with a population between 106,000 and 107,000 in the 2000 census. It's certainly nobody's fault that the only local government fitting this bill just happens to be Allentown.
Aside from the outright grant, what's really repulsive about this is that taxes that should go to the state, to pay for things like schoolbooks and Medical Assistance, will instead be funding a J.B. Reilly development, helping him get richer....
What is also repulsive about this program is the secretiveness and selectivity with which it was implemented. Although it was known that the Arena Authority would be able to use the taxing vehicle for it's debt service, it's availability to private parties was not publicly disclosed. I attended a private meeting with Allentown's Community Development Director, Sarah Hailstone, and the merchants. During the course of the meeting, and a subsequent one, it was never disclosed that private investors could utilize the tax advantages of the NIZ legislation. The merchants also had a meeting with Pat Browne, who also did not disclose the secret. In addition to the earned income tax, it also includes the 6% Pennsylvania sales tax. Had the merchants been aware of this tax incentive, it would have greatly enhanced their relocation options. The merchants and public only gained knowledge of this provision upon the announcement of J.B. Reilly's projects. At that point the Administration claimed that any application would have to be approved by them (AEDC) to see if it forwards the Vision for center-city. Whose vision? A new Authority is now being formed, and will be in charge of the Vision. All I see is favoritism.

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