Data Points: PILOTs and Shelby County Taxes

7 Comments

1. 

   John on September 30, 2015 at 3:56 pm

   One caution… contracts are not the same as PILOT projects. Many projects have several contracts for things like lease amendments and personal property agreements.

   For instance, EDGE has 75 approved PILOT PROJECTS. DMC (CCRFC) has 101. Health and Ed Board has 63. Add them up and and you have 239 projects with 458 related contracts. This doesn’t mean that we have assisted 458 businesses or renovated properties.

   Between Trustee Lenoir’s reports and the growth-engine.org database & archive, there is a ton of information available.

   We should debate the merits of financial incentives and inducements for development in a comparatively high tax rate environment. But it is hard to measure apples to apples with other communities when Memphis and Shelby County are one of the few areas to attempt an extremely high level of transparency.

2. 

   Smart City Memphis on September 30, 2015 at 9:39 pm

   Thanks, John. That’s why we specifically said contracts and not projects, but it’s a point we should have made.

   In other words, Memphis/Shelby County has 239 projects receiving PILOTs, Nashville has 14, Knoxville has 14, and Chattanooga has 60.

   PS: It would helpful if all the data and information could be aggregated on one site and maybe EDGE would take this one in the interest of transparency. Then again, this seems to be the purpose of the new GASB policy requiring the reporting of business incentives to the public. Hopefully, as a result of these new reporting requirements, we will be better able to compare Memphis to other cities to that we can finally separate fact from fiction.

   As you know, the new disclosures about a government’s own tax abatement agreements must include:
   The purpose of the tax abatement program.
   The tax being abated.
   The dollar amount of taxes abated.
   Provisions for recapturing abated taxes.
   The types of commitments made by tax abatement recipients.
   Other commitments made by a government in tax abatement agreements, such as to build infrastructure assets.

   The new standard also requires disclosures about tax abatements that are entered into by other governments that reduce the reporting government’s tax revenues. These include:
   The name of the government entering into the abatement agreement.
   The tax being abated.
   The dollar amount of the reporting government’s tax being abated.

   The standard takes effect for financial statements for periods beginning after Dec. 15, 2015. GASB encourages earlier application.
   – See more at: http://www.journalofaccountancy.com/news/2015/aug/gasb-tax-incentive-disclosure-standard-201512846.html#sthash.aR9A0fdy.dpuf

3. 

   Smart City Memphis on September 30, 2015 at 9:41 pm

   PS: Does EDGE’s total projects include the PILOTs that were in effect when it was created? We’re assuming it does, but we just want to be sure.

4. 

   John on September 30, 2015 at 10:31 pm

   Yes. The 75 number does include former IDB numbers. And includes new(ish) approvals that are in ramp-up but have not yet hit the Treasurer’s report.

   Number not in front of me but I believe the total in the four years of EDGE is 38.

5. 

   John on September 30, 2015 at 10:51 pm

   If GASB works as intended. My fear is that it may still be easy to hide incentives when they are not nationally standardized to begin with.

   TIFs are thrown around as a common incentive to pick on (like PILOTs). But some offer loans, others grants, others infrastructure improvements, etc. The effected parcels can be site specific or vast districts. We are still going to have to squint to figure this out and look under rocks for what is not being shared by our competitors.

   Are income tax rebates like Mississippi’s going to show up?

   Are land contributions or government building leases going to count?

   How are bond issues going to be tracked?

   Do non-profits that act as a conduit for grant contributions going to have to report or start segregating their funds?

   For example, locally CCRFC is a state chartered industrial development board. They will likely have to report. But will CCDC or the Parking Authority? EDGE will report PILOTs but what if they cut a sweetheart deal to a user of the Port to land a big employer… that isn’t a tax incentive? (I just made that up… any resemblance to an actual project is coincidence).

6. 

   Smart City Memphis on October 1, 2015 at 4:06 pm

   Thanks, John, for the data for past four years and the number of PILOTs inherited by EDGE. It seems like a factoid that EDGE should work hard to get out to public.

   Also, you’re right about GASB. It may be a step in the right direction, but it’s a longer journey to get the full information we all really want. Definitions of subsidies definitely would need to be expanded to include TIFs or any other vehicles used to subsidize businesses that don’t fit neatly under the heading of tax abatements.

   Hope springs eternal. It would be good to live in a world where the public’s business was all out there so every person could make individual judgements (and I hasten to add that EDGE has been recognized nationally for its transparency), but it is now simply impossible to compile a comprehensive list from information available online.

   Even advocacy sites opposing corporate incentives (like Good Jobs First) seem unable to crack the code in a comprehensive way, which is to say that you are probably right that those of us who would like to compare apples to apples will continue to have an incredibly hard time doing so.

   Thanks for weighing in. As always.

7. 

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