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Tuesday, September 25, 2012

What Is A Tax Abatement?

What is a Municipal Tax Abatement?

"Each year in New Jersey, municipal governments forego hundreds of millions of dollars in revenue through reductions of or exemptions from taxes in the name of economic and community development. Referred to as tax abatements, these exemptions are granted typically to businesses and developers to encourage them to make improvements to property or to locate a project in a distressed or blighted area. The impact of such abatements is significant and far reaching and the financial stakes are high, involving billions of dollars in New Jersey property value. Despite these high stakes, in New Jersey little is done to monitor the use of such abatements, to ensure that they are appropriately awarded, or to determine whether they achieve their purposes.

Tax abatements result in significant foregone revenue and introduce tax inequities that deserve closer scrutiny. The recommendations in this report are geared toward broad based changes that will help to ensure more open and fair investment of taxpayer dollars and better decisions and outcomes in the future..."  A. Matthew Boxer, State Comptroller.

A few days ago, I commented on 2 stories in northjersey.com and my comments were deleted in less than an hour. The articles highlighted the fact that our City Council is planning to borrow millions in order to pay tax rebates to big developers that are slowly devouring our City. Deleted were the questions that are burning in the minds of many residents, especially homeowners. What is in it for the homeowner when the big developers build their multi unit dwellings and get tax abatement deals that save them millions of dollars? What is in it for the regular home owner Joe or Josephine when big developers cover all of the free space with concrete and walk away to their spacious and suburban properties leaving us with a giant complex that may not live up to the promises they made when brokering the deal? What is in it for us? Who is paying for the tax abatement due the developers not named in the northjersey.com articles? Who suffers the most in the wake of tax abatements?

Perhaps they did not appreciate the questions posed. Who knows why? It does not matter. The questions must be asked. It became totally clear during the Master Plan Public Hearing at Community Baptist Church that all roads lead to developing every inch of open space left in Englewood. It has always been a puzzle as to why tax abatements are so attractive. We are not so urbanized that the City cannot survive without this.

The burning question is this. What do the big developments and developers do for the average homeowner? Not one politician, friend or not has been able to give me a satisfactory answer. Who do you think is going to end up paying for all this borrowed money? Come on, you know. We are. The little guys.

Now let us discuss these above reproach volunteers that run our Municipality. What do they get? What is the reward for the Mayor, City Council and others to make tax abatement deals with the big developer? Does all of this connect to SEEK, the present board of Education and the Hill Folk?  Probably not directly, but it does raise questions that should be answered.

Closer to the point: What do the other Wards gain by appointing the 4th Ward Council Person of their choice? Why is it so important for them to control the 4th Ward? The answer is an easy one. We have the most undeveloped space. We have spaces that may be driven into blight so that area then reflects exactly the definition of the areas for which tax abatements are given.

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