Where the Deals Are
Tax breaks and other incentives have become a popular tool for winning jobs as companies look for places to locate new plants. Incentives are also frequently used to keep companies from moving. In both cases, schools' property taxes are easy targets.
School officials in Nebraska want a role in local economic-development decisions that divert school taxes to business development in blighted areas. Last year, Nebraska schools saw at least $7 million in school taxes go to support economic projects under a process called tax-increment financing.
The Elk Run Coal Co. is one of several coal companies in West Virginia that received more than $1 million in tax breaks in 1994 under statutes that give "super credits'' to qualifying businesses. Elk Run's tax credit was on state taxes that apply to the removal of natural resources.
New York City
Madison Square Garden co-owners ITT Corp. and Cablevision Systems Corp. pay no property tax on the $189 million sports complex. The deal, worked out in 1992, saved the owners $9 million last year. The break is a big incentive to potential buyers of ITT's 50 percent share, which is for sale.
Thanks to the discounted taxes that BMW received to locate here, the German automaker paid only about $5 million in property taxes on real estate and equipment last year. That is about $32 million less than what the company would have paid at the full tax rate.
Dade County, Fla.
Local officials recently gave Pan American World Airways a 10-year, $8.5 million incentive package to keep the airline's headquarters there. The incentives were coughed up based on estimates that the project would create 600 new jobs and $25 million in revenue over the next 10 years.
When Total Systems Inc., a credit card processing company with about 1,800 employees talked about relocating, the state created the Capital Partnership Program. The initiative provides specialized workforce training for businesses at state universities and colleges. Tuition is paid with state and private funds.
The Arizona Center for Law in the Public Interest has filed a lawsuit to bar state use of foreign trade zones to give tax breaks to select businesses. For example, a Wal-Mart distribution center in Maricopa County paid $91,807 in property taxes last yearone-fifth of the full rate.
To help movie magnate Steven Spielberg and his partners build their $200 million DreamWorks SKG studio headquarters near here, the city will provide $50 million worth of street and infrastructure work and about $20 million in reduced rates for services, such as sewer hookups.
Vol. 16, Issue 25, Page 32Published in Print: March 19, 1997, as Where the Deals Are