Wind PILOT: Show need for tax abatement
Watertown Daily Times|November 24, 2009
The momentum to ram through a property tax break for the developers of the Galloo Island Wind Farm has slowed down to allow for more public consideration and a broader understanding of what is at stake in the proposed giveaway of tens of millions of dollars. ...The school district and town without raising any questions unanimously agreed to a plan that ...is less than half of what they could expect annually for the next 20 years if the project were fully assessed.
The momentum to ram through a property tax break for the developers of the Galloo Island Wind Farm has slowed down to allow for more public consideration and a broader understanding of what is at stake in the proposed giveaway of tens of millions of dollars. ...The school district and town without raising any questions unanimously agreed to a plan that ...is less than half of what they could expect annually for the next 20 years if the project were fully assessed.
The momentum to ram through a property tax break for the developers of the Galloo Island Wind Farm has slowed down to allow for more public consideration and a broader understanding of what is at stake in the proposed giveaway of tens of millions of dollars.
The Sackets Harbor School District and town of Hounsfield hastily moved to accept the payment-in-lieu-of-taxes plan negotiated by the Jefferson County Industrial Development Agency with Upstate NY Power Corp. The school district and town without raising any questions unanimously agreed to a plan that would divide among the town, district and county $2.14 million a year in PILOT payments. That is less than half of what they could expect annually for the next 20 years if the project …
... more [truncated due to possible copyright]The momentum to ram through a property tax break for the developers of the Galloo Island Wind Farm has slowed down to allow for more public consideration and a broader understanding of what is at stake in the proposed giveaway of tens of millions of dollars.
The Sackets Harbor School District and town of Hounsfield hastily moved to accept the payment-in-lieu-of-taxes plan negotiated by the Jefferson County Industrial Development Agency with Upstate NY Power Corp. The school district and town without raising any questions unanimously agreed to a plan that would divide among the town, district and county $2.14 million a year in PILOT payments. That is less than half of what they could expect annually for the next 20 years if the project were fully assessed. Full taxes would have cut the county tax rate 66 cents in the budget adopted last week. That would reduce every Jefferson County property tax bill 10 percent.
Another $23 million will be lost by the state, county and town by granting exemptions to the sales tax and mortgage fees on the nearly $500 million project. And none of these figures include the tax breaks expected to be sought on a new power line. It is too high a price to pay based on unfounded assumptions.
Proponents argue that the tax break, like other incentives of its type, are necessary to keep the company from taking its investment elsewhere. But that does not hold up. Upstate Energy and other wind power developers came to the north country because the region has the natural resource they need. There is no evidence that they will go someplace else.
The rush to approve the PILOT is driven by other financial considerations. Upstate Energy will receive a 30 percent grant - not a loan but a gift - in the range of $150 million from the federal government, if it can complete construction on some of the turbines next year. The argument by PILOT advocates that developers will not undertake the project without the expectation of a local tax subsidy is unconvincing. PILOT supporters need to present evidence that there is a real threat that Upstate Energy will not build without Jefferson County residents providing tax incentives in addition to those from Washington and Albany.
It is also troubling that the PILOT is being pushed through in phases without considering the full impact of the development that includes a $153 million transmission line through Jefferson County and into Oswego County. The PILOT does not address what some experts estimate is $60 million worth of electricity that will be generated at today's rates. That annual income makes the difference between $2.1 million and $4.8 million in property taxes immaterial to developers, but it is material to every property owner in the county. There is no need for a tax break from Jefferson County, if its natural resources are producing $60 million in revenue.
It does not make sense that Jefferson County would approve a PILOT on the generation part of the project until Upstate NY determines how it is going to get the electricity to the mainland.
It makes no sense for the county to give a tax break now when it may be asked to exercise its power of eminent domain to take valuable agricultural land from family farmers to benefit the developers.
It makes no sense to grant tax breaks for the handful of permanent jobs the project will bring.
The last hurdle for the PILOT is the Jefferson County Legislature. The proposal already failed to clear its Planning and Development Committee, which scheduled a special meeting tonight to review the PILOT to seek answers from JCIDA and Upstate NY Power Corp. If the plan makes it by the committee, the next stop will be the Finance and Rules Committee before going to the full board.
Everyone in Jefferson County will be impacted by this project. There has to be some benefit to all county residents and the best and fairest means is to tax the development the same way almost every other taxpayer is taxed - at full value. The Legislature should not approve any tax benefits for the project unless a convincing argument has been made that every county property tax bill should be higher simply to appease a developer.