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Keystone Opportunity Zones in Pennsylvania permit tax-exemption for only those residing/locating in the zones while others outside the zones must pay full share of taxes or face fines, liens, eviction, and sale of house/business in a tax sale for failure to pay up.

Exclusive coverage Net the Truth Online

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?
 
By Jason Lesher
TRIBUNE-REVIEW
Friday, July 25, 2003

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?

 

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

 

 

10pm 9/1

Q1See 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

 
No earned-income tax, and more...
 

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. 
 
 

    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.

    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

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