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October 01, 2014
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Tax abatement program proposed for Hawley


It’s frequently argued that communities need some tax-incentive programs these days to attract new businesses or to expand existing ones, and that a by-product of such expansion is the creation of new jobs for the area.

Local attorney R. Anthony Waldron has submitted to the Hawley Borough Council such a plan, which would offer some kinds of tax abatements, but on new improvements only. Property taxes that already exist would not be affected.

The legal authority for such a program comes from Act 76 of 1977, amended in 1998, known as the Local Economic Revitalization Tax Assistance Act (LERTA). Waldron says that the act has been utilized in about two-thirds of counties in Pennsylvania.

The abatement would apply to both new and existing businesses.
“There would have to be an improvement worth about $500,000 in order for a business to qualify for the abatement,” he said. “A further requirement would be that the program would result in at least 10 new jobs. We could be flexible on that point as to an agreed number of jobs.”

Waldron will propose such a program to the borough, the Wallenpaupack School District and Wayne County.
“I have already talked to the Wayne County Commissioners, who have reacted positively to the idea,” he said. The borough council, who has already heard from him, will react at their next meeting, he said.

The River Reporter has reported about a similar program for Pike County, presented by Michael Sullivan, Director of the Pike County Economic Development Authority. The program offered by Sullivan covers five years of abatements whereas the Waldron program covers 10 years. Abatements begin after the sixth year up until 10 years. After 10 years, the business pays taxes in full.

The Sullivan plan covers five years with an ascending percentage of abatements beginning at 20% and ending in the fifth year at 100% with full taxes. In the Waldron plan, the percentage of abatements would begin similarly with 20% and finish in the 10th year with full taxes and no abatement.

Waldron said that school taxes represent about 68% of all taxes paid; 16% of county taxes and 14% of borough taxes. He said that the school district is willing to consider the abatement if the borough approves. The county is waiting to see what the schools will do.

Not all taxing entities have to be on board for the program to function, although that would be desirable for the Silk Mill and other businesses, Waldron said.

Waldron said the Wayne Economic Development Corporation (WEDCO) has been pushing for boroughs to consider LERTA in order to encourage investment in commercial properties, save historic buildings and bring in jobs.

Hawley Borough Council has agreed to hold a public hearing at the borough council hall at 94 Main Street to discuss the proposed amendment. The hearing will be on Wednesday, December 12 at 6 p.m. prior to its regular meeting.