Helen Burns Sharp, founder of Accountability for Taxpayer Money (ATM), testified Wednesday at the quarterly meeting of the Tennessee Advisory Commission on Intergovernmental Relations (TACIR).
ATM is a Chattanooga-based public interest advocacy group that focuses on tax breaks (PILOTs and TIFs) and government transparency. TACIR is an intergovernmental body of state and local governments that serves as a forum for the discussion and resolution of intergovernmental problems and provides quality research.
Sharp appeared on a panel of experts on issues surrounding PILOTs. Other panelists included officials with the Memphis economic development organization (EDGE), the State Board of Equalization, the University of Tennessee’s Center for Business & Economic Research, and an attorney who specializes in economic incentives.
“ATM felt honored to have a seat at the table,” said Ms. Sharp. “I presented the taxpayer perspective on PILOTs. Frequently the officials who vote on PILOTs only hear from folks who stand to benefit financially if the tax break is approved.”
ATM’s position is that PILOTs can be a valuable economic development tool but that our local governments need to become much more strategic in awarding and enforcing the agreements. “Tax breaks should be reserved for projects that provide significant public benefit that likely would not happen without the incentive (the ‘but for’ test).”
Ms. Sharp came armed with numbers. She estimated that about $20 million in city and county property tax revenue will not be collected this year in Chattanooga due to PILOTs. Many agreements last between 10 and 30 years. She said that property taxes account for almost 60 percent of city and county general fund revenue.
She showed a map showing that almost 30 percent of parcels in Chattanooga have some form of tax-favored status (government, charitable, PILOT, TIF).
ATM maintains that the solution to this problem is the adoption and enforcement of meaningful policies and procedures. The organization has prepared a draft of what they might look like. They appear on their web site, www.atmchatt.com.
TACIR staff will prepare a report with findings from their PILOT study. It will be sent by February 1, 2018, to the State and Local Government Committee in the Senate and the Local Government Committee in the House of Representatives.