April 12, 2011 —
Back in 2006, when officials decided to grant tax abatements to the Millennium Pipeline Company, the company agreed that as a way to help the affected communities it would commit $100,000 a year for 10 years to spur economic development.
At the time, the Sullivan County Industrial Development Agency (IDA) joined seven other counties in the state in agreeing to grant the company significant tax abatements as they expanded the gas pipeline from 12 inches to one that was 30 inches.
During the run-up to the decision, the company said that if it did not receive the tax abatements from all of the counties, it might decide not to proceed with the expansion project, which would have meant significantly less tax revenue for many municipalities.
In Sullivan County, the pipeline runs through Bethel, Cochecton, Delaware, Forestburgh, Fremont, Highland, Lumberland and Tusten, and politicians in several of those towns argued that the company had no choice but to expand in the present location, because negotiating rights of way for a new line would be prohibitively expensive. Some town officials, therefore, argued that the tax abatement should not be granted. The IDA, however, chose to grant the abatements.
At a meeting at the government center on April 7, Jennifer Brylinski, the executive director of the IDA, told lawmakers that the agency had received two of the $100,000 payments from the company, and was now considering ways of administering a loan fund to help support economic development. She said that Sullivan Renaissance has been helping the agency with the process.
Lawmaker David Sager, however, noted that the amount of tax abatements to Millennium would be worth over $15 million to the company over 15 years, while company payments to the county would only amount to about $1 million.
Alan Scott, CEO of the IDA, defended the tax abatements. He said, “In my opinion, all the towns really should have jumped into approving and supporting this project because the assessed value of the pipeline was running down. So after a period of two years, the tax benefit was actually increasing, and is increasing for the life of the project. So the schools, the towns and the county are getting more tax revenue than they would have gotten if we had allowed the previous project to run out, and if Millennium had not started replacing that pipe.”
Sager said he disagreed. He said, “They wanted a bigger pipeline because they knew they would be transporting more natural gas. This never made sense to me, and it’s one of the reasons I ran for the legislature in the first place; so it’s great that I get to sum it up in one of my last months in office.” Like other officials, he said the company was going to replace the pipe regardless of what happened and it was unnecessary to give the company large tax abatements.
At the time, the officials in Tioga County decided not to follow the other counties and chose not to grant any tax abatements on the project. A spokeswoman for the Tioga County Industrial Development Agency said in a phone interview on April 8, that the policy remains in place today and Millennium pays full taxes to all municipalities.