Helen Burns SharpThe Chattanooga City Council and Hamilton County Commission recently heard from the Chattanooga Area Chamber of Commerce about a call center, known as HomeServe, that is requesting a tax break agreement.
We’ve come to call these tax breaks PILOTs (payment in lieu of taxes). This recent case shows how little has changed in the PILOT world since our first “jobs” PILOT more than 30 years ago. But it also suggests there is hope for the future and that the new city council may lead the way.
Ours remains a good ol’ boy system where approval decisions seem to be informally made by the chamber and the city and county mayors before the applications appear on the agendas of the council and commission. Our governments, which have outsourced their economic development program to the chamber, have never provided the chamber with policies about how it should decide which applications to bring forward for tax breaks.
It is unusual for a city or county of our size to fly by the seat of its pants without any guidelines. It can lead to a perception of crony capitalism.
Everyone realizes the importance of jobs, so you can understand why members of the legislative bodies want to “help.” When jobs’ PILOT applications appear on council and commission agendas, members might assume that the tax break is necessary, the public will benefit, and the companies’ commitments will be monitored and enforced. Unfortunately, that has not always been the case.