Tax abatement programs for city proposed

March 1, 2013
Vacant stores in several condemned buildings with boarded-up windows and doors line West Chestnut Street in Washington. - Jim McNutt / Observer-Reporter Order a Print

Two six-year tax abatement ordinances for new construction and improvements to blighted properties in Washington will be presented to City Council and Washington School Board in the next couple of weeks.

The city’s current tax abatement ordinance, or Local Economic Revitalization Tax Assistance Act, is set to expire in the summer. The new ordinance seeks to extend the LERTA while providing a graduated abatement program.

Another program addresses the city’s business privilege and mercantile taxes.

The ordinances will be presented to City Council at its 6 p.m. Monday agenda meeting by Matt Uram, a member of the business district authority, and Pete Stefansky, Main Street manager.

They, along with Councilman Matt Staniszewski, will make a similar presentation at Washington School Board’s March 11 meeting.

Under the proposed new ordinance, the abatement will be available for any new business locating to the city. The deduction would be 100 percent in the first year; 85 percent in the second; 66 percent in the third; 50 percent in the fourth; 34 percent in the fifth; and 17 percent in the sixth year.

The overall goal is to improve the quality of neighborhoods, Staniszewski said. He said under the existing program, renovations have been made to homes in a number of city neighborhoods, and it has led some developers to express interest in the city.

A homeowner who participates in the LERTA is given a break on any tax increase that would stem from improvements that include roofing, siding or windows.

Last year, Uram formed a think tank within the business district authority to include property owners and businesspeople. Its goal is to develop a plan to spur economic activity in the city that would create well-paying jobs and eliminate blighted properties.

The group discussed how to improve the LERTA to attract business into the city. Property owners would not be eligible for the LERTA program if they are receiving tax relief through a Tax Incremental Financing, or TIF, plan. Nor would property owners be eligible if they have delinquent taxes.

The group also is addressing the city’s business privilege and mercantile taxes, which often are seen as a deterrent to business coming into the city.

Prior to enactment of the residential LERTA in 1999, the city had one for designated business districts, which it continues to extend.

Copies of the draft ordinances are available by calling Staniszewksi at 724-225-2781 or Stefansky at 724-229-7202.



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