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PA Governor: KO Zones A OK Neglects Tim Mahoney Admission Unfair Not Uniform July 5, 2008
Campaign statement Tim Mahoney
Kreystone Opportunity Zones Unfair State Legislator Tim Mahoney Agrees
Keystone Opportunity Zones: From Boon to Boondoggle in Three Easy Steps, 9/13/2004 Pa.L.Wkly. S4, Stuart
F. Ebby: the author criticizes as possibly unconstitutional the expansion of tax-free development zones from impoverished
areas to prime Philadelphia real estate.
Lawmakers consider expanding Pennsylvania Keystone Opportunity Zones Friday, May 30, 2008
Company locates because it's tax-free
Commissioner candidate objects to KOZ
In latest legislation, section permits the Governor of the state of PA to designate deteriorated property (as a keystone
improvement zone) by Executive Order.
Hey, Gov. how about all of the local Fayette County resorts that will be put out of business when the Springhill Township
operation gets started?
Let's watch what happens to Nemacolin Woodlands Resort and Spa, for instance, after a decade of trying to attract buyers
for new resort condominiums, houses to be located off I-84, priced about the same range as those to be developed on the tax-free
property.
How about the small businesses in the area that will potentially lose profits because they will be put in competition
with employers who locate a business in the new Crystal Springs Properties planned 150-acre business park catering
to office buildings, a convention center, a 42,000 square-foot clubhouse, a driving range and a second golf course with another
clubhouse.
And how about that Hopwood, PA driving range? Will it survive another decade in Fayette County when it has to pay
all taxes to the state and local government entitities while the other KOZ driving range won't have to suffer the burdens
of many of those same taxes?
Track what came before
AND how quickly KOZ was rushed through the state General Assembly
Recall, there was barely a two month period in-between new legislation providing for KOZs, and the presentation
by Fay-Penn for local taxing authorities including school districts, municipalities, and county board of commissioners to
consider binding resolutions to waive local taxes .
Keystone Opportunity Zone was established by state legislation in 1998. Fay-Penn Economic Development Council
handled the KOZ application for the county of Fayette. Commissioners approved a resolution which encompassed the targeted
areas for KOZ designation and waived taxes for those entitities, December 10, 1998. Three taxing bodies each had to
pass separate resolutions which authorized waiving of taxes within their jurisdictions. Area school board members,
city council members, and township supervisors had to vote to adopt similar resolutions which waived local taxes in their
jurisdictions. Those which agreed with KOZ had to sign on the dotted line before the deadline for submission.
Was this enough of a time period for local citizens to gather proper information and the local school board directors, county
commissioners, and municipality board member to also learn of all of the potential ramifications?
Gov. Ridge Unveils New Keystone Opportunity Zones
Gov. Tom Ridge this week unveiled the states 12 new Keystone Opportunity
Zones (KOZs) where state and local taxes will be eliminated to stimulate job creation and community renewal in some of Pennsylvanias
most challenged communities. Gov. Ridges Feb. 25 announcement triggered a series of announcements in every region of Pennsylvania.
Only one other state Michigan has a program similar to this landmark
initiative, signed into law by Gov. Ridge in October.
"Tax-free Keystone Opportunity Zones provide a powerful incentive to bring
new jobs, new families and new hope to our communities," Gov. Ridge said, standing in front of an abandoned public-housing
project, scheduled for demolition and redevelopment, in Chesters West End. "What better incentive is there to create jobs
and build stronger communities than to eliminate taxes? In Pennsylvania, there now are more than 26,000 acres available tax
free for job creation and community development."
The 12 zones are: City of Philadelphia; Lehigh Valley; Luzerne/Lackawanna;
Northcentral; Northern Tier; Northwest; Schuylkill/Carbon; Central Pennsylvania; Southcentral; Southeast; Southern Alleghenies;
and Southwest. A total of 54 of the Commonwealths 67 counties will participate in the KOZ program, covering more than 26,000
acres and including 118 subzones. Each zone includes as many as 5,000 acres and can comprise up to 12 subzones of at least
20 contiguous acres
"For decades, government has tried numerous well-intentioned spending
programs to help these neighborhoods but they havent worked," Gov. Ridge said. "Now, in Pennsylvania, were going to try something
different. We will eliminate state and local taxes in these zones for up to 12 years. Government wont lose much revenue, because
these communities dont have much economic value to tax right now. But by temporarily giving up these taxes, we stand to turn
these communities around and, ultimately, government will get additional tax revenues to boot."
For a more detailed list of zones and subzones or for more information about KOZs, access the Pennsylvania homepage at
http://www.state.pa.us, or directly at DCEDs website at http://www.dced.state.pa.us.
February 26, 1999
What will the PA Governor in the year 2028 say when unveiling another such economic development tax-forgiveness program?
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1. The earned income (i.e. wages, salaries, commissions, compensation or other income) for services rendered or work performed
by a resident of a KOZ will not be subject to tax. The
language of the act gives the tax exemption to the resident of a KOZ... Nonresidents of a KOZ will be subject to tax even if employed within a KOZ
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10pm 9/1
Q1 See what they get and you don't.
not stipulate that the residents services must be performed
within the KOZ.
Therefore, residents of a KOZ employed outside a KOZ are entitled
to the
exemption and their employers would need to claim the withholding
exemption or
tax credit.
Nonresidents of a
KOZ will be subject to tax even if employed within a KOZ
While the state of PA touts the economic development benefits of KOZs, some still aren't convinced. In fact, since
the original legislation was passed in 1998, signed into law by former governor, Tom Ridge, there have been several expansions
of KOZ legislation.
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Several legislative proposals would expand the program by increasing the allowable amount of acreage per zone
from 1,500 to 3,000 acres and continuing the program for an additional 15 years, expiring on December 31, 2028. The most recent
proposal is S.B.1478, introduced and referred to the Senate Finance Committee on June 17, 2002.
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In addition, H.B. 2641 would allow for creation of fourteen "Keystone Agricultural Parks" with the same tax
abatements and incentives offered to investors operating in Keystone Opportunity Zones. The goal would be to enhance agricultural
related development, establishment of businesses to serve business needs of the farming community, and cooperative ventures
to benefit the agricultural community. H.B. 2641 was referred to the Agriculture and Rural Affairs Committee on May 8, 2002.
To date, new legislation has lengthened the program to the year 2028. Wink-wink, the legislation will expire at
that time. Anybody want to make a futures bet on that expiration date?
Local municipality, school district, and county officials in their capacities as taxing bodies had to agree to waive
local taxes, including real-estate property taxes.
I know your time is valuable, when you are free, find more information in material gathered over the years
resources and links
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