LOOK IT UP
Find information about local payment-in-lieu-of-tax agreements at www.hamiltontn.gov/PILOT/
Amid mounting pressure from transparency activists and accounting experts, Hamilton County government has released a comprehensive list of tax breaks granted to corporations, typically given in exchange for a company’s promise to expand, build new facilities and/or hire additional personnel.
The list, posted Friday, includes active tax breaks granted by the Industrial Development boards of Chattanooga and Hamilton County, as well as the city’s Health, Education and Housing Facilities Board, which was embroiled in a debate recently over tax breaks to the Chattanooga Choo Choo for a renovation that will include below-market-rate apartments.
The information posted by county officials largely mirrors that gathered by activist Helen Burns Sharp and shared with the public in recent months. The county’s list is limited to active tax break agreements and does not include the recently approved tax break for the redevelopment of the Maclellan Building downtown.
“I think they have come to realize that it’s not just me” raising concerns, Sharp said after the list was posted. “It’s interesting and encouraging to find that this issue is resonating with others from across the political spectrum.”
The posted information also comes as the Government Accounting Standards Board, which sets national accounting standards, considers whether to require governments to track how much they’re forgiving in taxes each year and report it as lost income.
That would require Hamilton County and Chattanooga to disclose how many tax dollars were not collected from companies such as Volkswagen, Coca-Cola Bottling, Southern Champion Tray and nearly 20 others.
Activists like Sharp charge that the process for granting companies payment-in-lieu-of-taxes, or PILOT, tax breaks is subjective and shrouded in secrecy. She’s been joined by supporters ranging from Mark West, leader of the Chattanooga Tea Party, to Perrin Lance, executive director of Chattanooga Organized for Action, a social justice group.
“I really don’t see that [the tax breaks] as a need at this point,” West told the Times Free Press recently. “We’ve seen Chattanooga develop and thrive over the last couple of decades to the point where I think companies and people are clamoring to come to our city. And on the other hand, our city and community has a need for revenue.”
Lance has questioned why funds are being diverted to corporations, some of which are already located in Chattanooga, and high-net-worth businessmen instead of other priorities like education.
But supporters have argued that both the tax breaks and some of the secrecy surrounding them are vital.
Public officials and members of the Chattanooga Area Chamber of Commerce, an organization that has negotiated many PILOT agreements and brought them to local governments for approval, say the closed-door negotiations are key to protecting Chattanooga’s competitive position in the business world.
“I know people think these expansions aren’t competitive, but they are,” Hamilton County Mayor Jim Coppinger said. “We are just as aggressive about expansions as we are about relocations. It’s what the people of this county expect of us — to grow this county through economic development.”
Chamber members also say some degree of secrecy is essential to protect the integrity of sensitive negotiations and to protect companies’ proprietary information.
The latest PILOT push by city and county officials has largely focused on tax breaks for residential real estate developers who offer affordable housing in at least 20 percent of their dwellings. But that program has been criticized by some as wholly unnecessary in a booming downtown housing market, while low-income advocates have said that it’s not nearly enough to solve what they call an affordable housing crisis.