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KOZ Background

KOZ info here

KOZ Details
FAYETTE COUNTY ADOPTED KOZ RESOLUTION ON DEC. 10, 1998

At a special meeting to consider adoption of a preliminary budget for Fayette County, a segment of the meeting included a presentation by Fay-Penn Economic Development Council to the commissioners on the application and resolution for Fayette's inclusion in a regional KEYSTONE OPPORTUNITY ZONE (KOZ).

FOLLOW THE SAGA

  • a letter from Fay-Penn to the commissioners
  • A draft resolution what it should include
  • Dec. 10, 1998 Commissioners' Resolution 98-12-10-1 Signed
  • March 25, 1999 amendment to Resolution 99-12-10-1 Unsigned
  • Public Primer on KOZ
  • Public Proposal by Fay-Penn to Commissioners
  • MISSING FROM COMMISSIONERS' RECORDS

    Fay-Penn's PromoSite



    QUESTION THE AMENDMENT TO THE ORIGINAL RESOLUTION ADOPTED DECEMBER 10, 1998 A FULL THREE MONTHS AFTER STATE APPLICATION DEADLINE OF DECEMBER 31, 1998

    The deadline for an application to the state WAS December 31, 1998 while sites were then designated in February, 1999. The Amendment to the original resolution was passed UNANIMOUSLY by the county commissioners on March 25, 1999.


    WHAT HAPPENED LOCALLY?

    By their unanimous adoption of the KOZ application and resolution on Dec. 10, 1998, the county commissioners waived a number of taxes on the KOZ properties which have been since been publicly announced to total 5,600 acres. One of the taxes waived locally is real property taxes.

    WHEN DID THE COMMISSIONERS RECEIVE THE LETTER FROM FAY-PENN?


    Dated November 25, 1998
    Dear Commissioner Vicites:
    We have been very busy in the last two months working on a Keystone Opportunity zone (KOZ) application for Fayette County. This is a competitive process and only 12 KOZs of the expected 20 applications will be designated in the State. Enclosed is information on the KOZ program for your review. It is the single most important economic development issue facing Fayette County. One of the documents is a study conducted by the Allegheny Institute, which indicates that the most likely scenario could result in over $700 million in new capital investment and 16,000 new jobs over a 12-year period should Fayette and Greene counties receive the KOZ designation. To be eligible for the KOZ designation from the Commonwealth, each local taxing body must be willing to invest in the program to partner with the State in the form of local real estate tax abatements. Resolutions for the designation on specific properties have been reviewed by many township supervisors, school board members and all of the solicitors representing the following governing bodies, who have each passed an appropriate resolution:

  • Bullskin Township
  • Dunbar Township
  • Georges Township
  • North Union Township
  • South Union Township
  • Springhill Township
  • Albert Gallatin School District
  • Connellsville Area School District
  • Laurel Highlands School District
    Enclosed is a copy of the resolution that lists the various properties. It is imperative that the County passes a resolution at the next Commissioners' Meeting so that it can be included in the application prior to the deadline of December 31, 1998. A copy of the enclosures, along with the resolution, has been forwarded to Joe Ferens, the county solicitor for his review. We look forward to seeing you on December 8 to answer any questions you may have about the program and on December 10 at the Commissioners' Meeting. Hopefully, in working together, we will be successful in receiving the designation for Fayette County. If you should have any questions in the meantime, please do not hesitate to call.

    THE LETTER IS SIGNED BY MICHAEL W. KRAJOVIC


    WHAT DID FAY-PENN SEND TO THE STATE? ASK YOUR LOCAL LEGISLATOR TO PROVIDE YOU A COPY OF THE ORIGINAL FAY-PENN KOZ APPLICATION.

    A total of 12 zones can receive the KOZ designation statewide. In each zone designated, there can be a total of 12 subzones. The subzones have a minimum requirement of 20 acres, while the maximum for the combined subzones cant exceed 5,000 acres.
    It is reported that Fayette KOZs now total 5,600 acres. All tax-free zones, whether privately-held or publicly-held. If Fayette has 5,600 acres in the KOZ, how is that legal, given the KOZ legislation's requirement that a subzone maximimum acreage can't exceed 5,000 acres?


    MORE BACKGROUND

    In Pittsburgh, at the end of January, 1998, Governor Tom Ridge spoke about his economic development proposal called Keystone Opportunity Zones. According to a Tribune-Review editorial on January 20, No-Tax Zones, the proposal to eliminate all taxes for businesses and residents in the zones is an intriguing idea to spur economic development. On the surface, the Tribune states, we like the proposal. The program would be open only to new enterprise, effectively preventing exploitation of the zones by established businesses.

    Different versions of the legislation to create KOZes had been passed in the House and Senate at the end of June when the General Assembly recessed.

    Seven months after Gov. Ridges visit to Pittsburgh, a meeting was held at Penn State Fayette campus with a number of economic development specialists and elected officials in attendance. According to a Herald-Standard August 2 article, KOZ = Opportunity Knocking, featured speaker was David Kerr, an executive assistant in the office of the Deputy Secretary for Community Affairs and Development, PA Department of Community and Economic Development.

    On Tuesday, October 6, Gov. Ridge signed the bill allowing for the creation of 12 KOZes statewide. A next day AP article notes Gov. Ridges comments.

    Ridge said the zones are a solution to urban blight and abandoned properties, designed to encourage homeowners and employers to locate in these areas, raise families, create jobs, and renew the community.

    Government has tried numerous will-intentioned spending programs to help these neighborhoods, but they havent worked, Ridge said. Neither the state nor local governments will lose much revenue because the communities now do not have much economic value to tax, he said.


    "I will be proud to sign this bill into law." Gov. Ridge noted the tireless efforts of Rep. Joseph M. Gladeck Jr. (R-Montgomery), the bill's prime sponsor; Rep. Roy Reinard (R-Bucks), Chairman of the House Local Government Committee; and Sen. Melissa A. Hart (R-Allegheny), Chairman of the Senate Finance Committee. Keystone Opportunity Zones are defined geographic areas where state and local governments partner to eliminate taxes on employers and residents to stimulate job creation and private investment where it's needed most.

    ASK THE ABOVE HOW KOZ IS CONSTITUTIONAL?




    WHO SUPPORTED KOZ

    A September 11 Tribune-Review editorial, KOZ and effect, references Allegheny Institute for Public Policy analyst Andrew McMullins study of the KOZ proposal before its final passage. McMullin raised pertinent questions about KOZ, and made recommendations to the state legislators.

    McMullin was contacted for this report. The Allegheny Institute is in full support of the KOZ legislation passed by the General Assembly and signed by the Governor, McMullin stated to queries about his study.

    Notable posits by McMullin according to the T-R article/editorial: If growth occurs in the KOZ as projected, the non-taxpaying occupants would absolutely be devouring public services in their respective community that they wouldnt be paying for: there must be some provisions made to local governments (especially school districts) expected to provide vital services but having a severely restricted tax base to do so, Mr. McMullin finds.

    The marketability of businesses within a KOZ would be phenomenal. But with the cold-turkey approach of at year 12 paying no taxes but in year 13 paying 100% taxes, that marketability could easily suffer. Some businesses, in fact, might very well leave the KOZ and seek tax breaks elsewhere. McMullin finds that scenario a classic argument for a phased-in restoration of the full tax liability.




    AIPP on KOZ :pay attention to PRIMER!