Guest Opinion: Just the Facts About PILOTs
Maureen Halahan | March 3, 2015
Let’s set the record straight regarding Payments in Lieu of Taxes (PILOTs) in Orange County. PILOTs actually ease the tax burden on every taxpayer and school district in our county. Without PILOTs we would be left with open unused fields, less taxes and no jobs. Large companies interested in expanding in Orange County have the option to take their businesses elsewhere. Without PILOTs, they would not come. That would result in the loss of millions of dollars in expendable income infused into our local economy. Companies that build here contribute significantly by generating school taxes, payroll, sales and municipal taxes. That’s a fact.
Let’s look at the Neelytown Road commercial district in Montgomery. Using numbers that came directly from the Orange County Real Property Tax Services Office, the Town of Montgomery Tax Office and from the companies themselves, here are the facts:
There are approximately 2,000 jobs generated by the large businesses located on Neelytown Road. Home Depot, Cardinal Health, FedEx, Do It Best, New England Motor Freight, Hunter Panels and UPS entered into PILOT agreements and collectively paid $2.7 million in school taxes to the Valley Central School District in 2013.
These seven companies paid 84% of the total school taxes generated on Neelytown Road. One company alone contributed more than $1.1 million to the Valley Central School District in 2013.
The companies with PILOTs on Neelytown Road also paid county taxes in the amount of $1.1 million or 75% of the county taxes generated in 2013 on the Neelytown Road corridor.
Critics complain that companies leave after their PILOTs end. This is not true. Not one company has ever left Orange County simply seeking a new PILOT.
Carlisle/Hunter Panels and UNFI, who recently located their businesses on Neelytown Road, received PILOTs and paid $120,000 and $153,847, respectively, to Valley Central Schools in 2014 (a combined total of $273,847.00). Prior to these two companies’ investment here, the two vacant fields paid approximately $35,000 to Valley Central. In the first year alone, Valley Central benefited from a $238,847.00 increase (that’s a 682% increase) over the prior year on those two empty fields. Without the PILOT, these companies would not have built here.
UNFI will pay its 260+ Orange County employees approximately $11 million in salaries in 2015. Typically 75% of a company’s payroll is redistributed within the local economy, equating to $8.25 million spent right here in Orange County from UNFI employees. That $8.25 million is redistributed over and over again, equating into hundreds of millions of dollars just from UNFI alone. If UNFI built elsewhere, that money would NOT be spent here.
Every company on Neelytown (whether they received a PILOT or not) pays taxes to the school district every year from the first year they arrive and every year thereafter. There is NEVER a reduction or a loss in tax revenues.
Economic Development Is a Competition
Site-selectors and corporate leaders will not visit a site in New York State without first researching incentives, including PILOTs. Period.
By supporting PILOTs, the Orange County Partnership and the Orange County IDA work to create jobs and lessen the tax burden on Orange County residents and businesses. The alternative is to do nothing. That leads to economic stagnation.
Those who spread misinformation about PILOTs divide us and hurt our chances to bring in more jobs and revenue to our schools. We need to pull together to help the economy in Orange County grow and prosper.
Maureen Halahan is the president and CEO of the Orange County Partnership