I am grateful there are citizens doing the heavy lifting and monitoring PILOT agreements.
Thank you, Helen Burns Sharp, ATM Watch Group. Chattanooga Organized for Action and so many others.
When citizens initially read these PILOT agreements, their first reaction is that local government needs to understand the cumulative impacts to the tax base. The data collected and compiled by Helen Burns Sharp is staggering and shows a trend that will eventually cause a property tax increase or reductions in municipal services. Her data can viewed by googling Helen Burns Sharp.
It is also amazing at how many PILOT agreements crafted by local government violate state law by waving the school portion of the property tax and waving stormwater utility fees.
How can this be?
The Chamber of Commerce and River City Company were granted absolute authority by Hamilton County and city of Chattanooga governments by resolution to negotiate PILOT agreements that wave property taxes for industry and developers. Some of these agreements have a duration as long as 20 years, or more.
Many reasonable citizens are concerned that our current elected city and county officials are encumbering municipal revenue for future leaders and services with PILOT agreements so far into the future that the impact is unknown. Someone must fund the municipal services for the corporations exempt from property taxes. In fact, the amount of property tax waved is so staggering, a uniform tax freeze for senior citizens is not possible in my opinion.
There have been some recent improvements in housing PILOTs that are a starting point. Mayor Berke gets points for recently removing PILOT authority from River City Company. That needed to happen. The most disturbing PILOTs originated from River City Company.
It would be very helpful if the city issued their own PILOTs, and removed third party Chamber of Commerce authority, as well.
Hamilton County and the city of Chattanooga governments through property taxes pay the Chamber of Commerce $1.2 million annually, and compensated the Chamber with an additional $900,000 a year for over five years during the VW PILOT and Bond Issues. Yet, when I asked the Chamber to produce a total cumulative list of PILOTs issued and the amount of property taxes waved, they advised me that tracking property taxes waved was not their role and that the Chamber is not subject to open records. Apparently, monitoring PILOT compliance is no ones responsibility.
What exactly does the Chamber of Commerce do for the $1.2 million annually? Does anyone know?
Bottom line, no one was monitoring the cumulative impact in lost municipal revenue until Helen Burns Sharp started compiling the data. After her data was published, the city moved quickly to establish a list that was only published within the past year.
Bottom line, PILOTs were issued for a decade without knowing the financial impact. Our elected city council and county commission approved PILOT agreements simply on an ideology that the benefit of developing property will exceed the cost of delivering municipal services.
Our elected officials approved every PILOT presented to them on the idea that all PILOTs result in more municipal revenue without considering services and without a public hearing.. Cumulatively, the impact is adverse to municipal services.
Finally, I thought Tennessee Code Annotated prohibited PILOT agreements that wave the school portion of the property tax.
Was the school portion of the property tax included in the reissuance of the Walnut Commons PILOT?
I don’t know, but it is concerning to see the school portion of property taxes and stormwater utility fees waved in other PILOT agreements. Who does that benefit?
Thank you to the citizens spending their own time on these PILOT debacles. It is a lot of work trying to piece the facts together.
April Eidson
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There isn’t but one solution to fix the problems with PILOT agreements, stop issuing them.
The following information is suppose to be supplied the state equalization board.
TN Code Annotated
(e) (1) On or before October 1 of each year, the corporation lessee shall submit to the state board of equalization an annual report containing:
(A) A list of all the real and personal property owned by the corporation and its associated entities and subsidiaries;
(B) The value of each listed property as estimated by the lessee;
(C) The date and term of the lease for each listed property;
(D) The amount of payments made in lieu of property taxes for each listed property;
(E) The date each listed property is scheduled to return to the regular tax rolls;
(F) A calculation of the taxes that would have been due for each listed property if the properties were privately owned or otherwise subject to taxation;
(G) The property address and parcel identification number of the property assigned by the assessor of property;
(H) The amount of rents paid to the governing body;
(I) The amount of any property taxes paid on the leasehold assessment under § 67-5-502(d);
(J) Any changes in the name since the last filing;
(K) How the payments in lieu of taxes are allocated according to the economic development agreement; and
(L) Identification of project type according to definitions provided in this chapter.
Of course most corporations are not supplying this information because the failure to file penalty is a joke.
(4) Each lessee of the corporation shall be responsible for the timely completion and filing of the report. Failure to timely complete and file the report shall subject the lessee to a late filing fee of $50 payable to the state board of equalization. In addition, any lessee failing to file the report with the board or the assessor within 30 days after written demand for the report, shall owe an additional payment in lieu of tax in the amount of $500. This payment shall be collectable by the trustee for the benefit of the county, in the same manner as property taxes, on certification from the board or the assessor.
Mike Lynn