Tax Abatement

Two weeks ago, officials held a ribbon-cutting to mark the grand opening of County House Village, the first attempt to provide low-income housing in this prosperous South Jersey community. Two years earlier, in a matter of hours and with no fanfare or ceremony, a group of investors - some with close ties to the township - reaped a windfall profit of nearly $1 million on the land deal that set the housing project in motion. The story of that land deal, which has now attracted the attention of federal authorities, offers a look at how development in the suburbs sometimes works.

Franklin Township officials have a simple refrain for their new tax abatement package. It goes something like this: We are not Washington Township. There, tax abatement has been nothing short of a disaster, Franklin officials said. Since approving a plan to give tax relief to local businesses in October 1989, Washington politicians have debated it and picked it apart - without putting it to much use. "We've read with less than bated breath the )lack of) success they've had," Mayor Harry Kennedy Jr. said at the first meeting of Franklin's tax abatement committee March 26. "It seems there have been many charges of favoritism, posturing.

The Central Bucks school board will reopen its 1991-92 budget the last week of this month to "abate" the district's real estate taxes as a result of the commonwealth's picking up more than its anticipated share of school funding. For those who have already paid their taxes - an estimated 80 percent of the district's taxpayers - it could mean they will get small rebate checks by mail. "All this is doing is giving the taxpayers back the money so the state can take it back from them," member Geryl McMullin said at the board's meeting Tuesday night.

West Deptford developer Anthony Guzzo left Thursday's Washington Township Council meeting a happy man. The council had approved his application for tax abatement, a decision that would save him almost $96,000 in property taxes during the first year that his planned Fries Mill Pavilion office park is in operation. But Guzzo's mood soured after a midnight phone call informing him he had not received the tax breaks after all. Minutes after he had left Thursday's meeting, the council had reversed itself and denied Guzzo's application.

Phoenixville Borough Council for two hours Tuesday night heard testimony about slum landlords, apathetic business owners and firetrap buildings, all the while looking for recommendations on a proposed tax abatement program. "I don't think that much was accomplished. We got more knowledge of what it was all about. But I don't know what you would really call accomplishment," Councilman John Fedora said yesterday morning. The hearing sought recommendations from residents and council members for boundaries for commercial and residential areas to be included in a Local Economic Revitalization Tax Assistance Act (LERTA)

The Greater Bustleton Civic League called Monday for repeal of the city's tax abatement program on new construction. Anticipating a call for tax increases in the mayor's budget address, to be delivered tomorrow night, the organization voted unanimously for repeal of the abatement program. Moments later, the 35 league members - meeting on the porch of the Bavarian Charity Society at 9940 Haldeman Ave. because of an error in scheduling - voted support for a suggestion that all construction be halted until "more police and firemen are sent up here.

A FEW YEARS ago, I bought a condo in Old City for my parents because they were looking for an excellent adventure to begin their retirement. After a couple of years of daily walks across the Ben, foreign movies at the Ritz and First Friday gallery-hopping, they've settled back into their Midwestern small town to grow old with the friends they've known since childhood. It was a great experience for all concerned. But, frankly, I'm glad it's over, because worrying about whether my newly hipster parents were home safe every Saturday night was a little too weird for me. Last year, I sold the condo and made some money.

City Council yesterday lifted the cap on residential tax abatements in an attempt to encourage new development. The measure, overwhelmingly approved by Council, exempts all new residential developments from paying taxes for three years after construction. The city had allowed a 100 percent tax abatement on the first $70,000 of market value of a new home or condominium. Extending the tax break to all new residential construction without regard to a property's cost was a victory for developers who said they needed the abatements to offset other high taxes and the generally high cost of doing business in the city.

Four applications for commercial-property tax breaks, including $8,231 for a proposed sports-medicine clinic at Lakeside Plaza, will be considered tomorrow by the Washington Township Council. The applications are the first batch to be reviewed since the council passed an ordinance over the winter allowing it to approve property tax cuts, also known as abatements, for new businesses. The tax-abatement program, which has been approved by the state, was designed to entice businesses to the township by offering a property tax break during their first five years of operation.

The New Jersey Attorney General's Office will review Washington Township's controversial tax abatement program, which was officially abolished last night by the Township Council. In a letter, Robert Levy, supervising deputy attorney general for the state's Official Corruption Unit, said his office had assigned a detective to investigate the matter. He declined further comment yesterday. The letter was sent to Councilwoman Virginia Weber, who had asked for the investigation.

Hiring the first employee can be so costly that many entrepreneurs never do it. They prefer to stay in solo businesses, which number more than 10 million in the United States. A brief summary of the regulations involved makes it clear why many decide not to become an "employer. " My electrician refuses to have an employee, citing the regulatory and tax hassles he would have to endure. Here's what he is talking about. Once a candidate accepts a job offer, the Fair Labor Standards Act kicks in, regulating minimum wages, overtime pay, and child labor.

When Councilman Frank DiCicco took office in 1996, Philadelphia was beginning to show signs of life after a long decline, though the coming renaissance was by no means assured. Center City was littered with empty buildings, and now-trendy border neighborhoods such as Northern Liberties were still largely emblems of urban decay. The curious new councilman asked developers why they were letting all that prime downtown real estate sit. He was told they could not make money renovating in a city with cumbersome taxes, antiquated zoning, and a long permitting process.

The other side of tax abatement A letter on July 1, "Tax abatement has been good for city," cherry-picked the positives while conveniently ignoring the negatives. Take the claim that "many" properties receiving the abatement are "derelict. " Actually, these represent a small percentage of all properties receiving the abatement. And, while the jobs created produce wage taxes, those taxes are a temporary revenue stream from temporary jobs. As for the claim that buyers who can afford these homes are higher wage earners and thus produce more wage taxes, it is beside the point, the point being that many of these high-income earners also pay substantially less property taxes for 10 years.

TRENTON - A program that allows towns to give out tax breaks to attract development receives little state oversight and causes school districts to lose out, according to a report released Wednesday by the state Comptroller's Office. The report said municipalities using the tax-abatement program often receive more money because they implement payment-in-lieu-of-tax agreements (PILOTs) with developers that almost exclusively channel payments to the towns. School districts, which would otherwise receive most of the taxes on a property, then get nothing.

TRENTON - A program that allows towns to give out tax breaks to attract development receives little state oversight and causes school districts to lose out, according to a report released Wednesday by the New Jersey Comptroller's Office. The report said municipalities using the tax abatement program often receive more money because they implement payment-in-lieu-of tax agreements (PILOTs) with developers that almost exclusively channel payments to the towns. School districts, which typically receive most of the taxes on a property, then get nothing.

A FEW MONTHS ago, Councilman DiCicco wanted to extend the 10-year tax abatement to 15 years. Then he wanted to give everyone a 12 percent real-estate increase, but withdrew it. Now Councilman Goode wants 9 percent. Then Councilman Green goes and rehabs his office at the expense of all of us because he wanted changes after the sprinkler system was installed at a cost of $18,000, $15,000 more than it should've cost. (For a stickler on money spent by the city, he should set a better example.

Facing stiff resistance from the natural gas industry, Gov. Rendell has expressed a willingness to make concessions on his proposal to tax the Marcellus Shale gas bonanza. Rendell, in a recent talk in Texas, encouraged the industry to accept a "modest and reasonable severance tax" and singled out the 5 percent levy on gas production in Arkansas. The governor's mention of Arkansas is significant because the Razorback State cuts the tax rate for shale-gas wells to 1.5 percent during the first three years of production.

AS CITY Council considers increasing real estate taxes to help balance the city budget, rowhouse owners may fret about a hike. But Ted and Barbara Arsonson won't have to any lose sleep because, regardless of the increase, it won't cost them one cent. Not next year, the year after, or the year after that. Ted and Barbara just bought a Center City condo for a tad over $12 million, reportedly the highest amount ever paid for a city residence. And under the city tax-abatement program, they'll owe no real estate taxes for 10 years.