100 PILOT tax break deals in city to hit $400 million; is that fair?

Erskine Oglesby speaks with a member of the public after a Chattanooga city council meeting. (Photo DavidTulis)

Our  Jobs PILOT program has been around since about 1985.

The City and County have approved about 100 PILOT agreements since that time.

By Helen Burns Sharp / Accountability for Taxpayer Money

About $400,000,000 in property tax revenue will not be collected because of these PILOTs. Some last as long as 30 years.

In the last fiscal year alone, $26 million in city and county taxes were abated.
According to a report done by a state agency, this is the largest amount forgiven by any Tennessee County, including the three urban counties that are larger than Hamilton.

The City gets almost 60 percent of its general fund revenue from property taxes.

When our city and county governments approve PILOT agreements, the businesses pay dramatically less property tax. This arrangement raises both tax equity and social justice concerns.

Why should homeowners and small businesses pay their fair share of taxes and also pay for the services (fire, police, etc.) for these companies? Is it appropriate for government to be picking winners and losers?

What about high priority community projects these uncollected tax dollars could be used for?

Mayor Berke announced that we have only claw-backed one time, even though a number of companies likely have not met their commitments on jobs, wages, and investment.

The one clawback was for Alstom, where the City and County agreed to settle for less that half of what the City’s outside counsel said we were due.

A typical business spends less than two percent on state and local taxes, yet we seem to be easily convinced that they would not locate or would relocate if they do not get a tax break.

The City and County have never adopted policies to evaluate PILOT applications. This is highly unusual for a city of our size.

We had hoped that the 2017 Council initiative led by Councilman Ledford would produce some meaningful policies.

We were disappointed to see the watered-down document on PILOT procedures that recently came back to Council after a year long review by the Mayor’s administration. We were disappointed to learn that City Council is apparently OK with the outcome.

This issue matters to a lot of Chattanoogans. What can we need to do to convince the City Council to take it seriously?

Helen Burns Sharp is a longtime former planner who helps run ATM.

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