Date: Fri 15-Nov-1996

Publication: Bee

Author: STEVEB

Quick Words:

EDC-tax-incentives-business

Full Text:

EDC Proposes Tax Incentives To Boost Business

B Y S TEVE B IGHAM

In its pursuit to attract business and industry to town to beef up the tax

base, Newtown recently welcomed both Danbury Square Box and Nu-Made Products.

Looking to increase the town's desirability for commercial development, the

Economic Development Commission (EDC) has proposed the implementation of a tax

deferral program to help promote desired business development in Newtown. The

plan, currently before the Legislative Council for its perusal, would offer

incentives to selected industries who locate or expand their existing

facilities within the borders of Newtown.

Both Danbury Square Box and Nu-Made Products would be eligible for tax

deferrals if the plan flies.

The tax deferral program, according to the EDC, would help bolster the town's

tax base. However, the plan could save certain companies as much as $20,000 in

tax abatements each year for the first three years, something that may seem

unfair to other taxpayers who don't get any breaks. But, as Elizabeth Stocker,

the director of community development points out, the savings to the company

would only be for three years. After that, the business would become a regular

member of the tax base for years to come.

"We're looking at the long-term benefits to the town," she explained.

According to EDC Chairman Walter Motyka, the town would not lose tax revenues

that it is now receiving for land and any existing improvements. What the plan

does, he said, is defer all or partial taxes on new investment for a

well-defined specific length of time.

Mrs Stocker discounted the possibility of a company taking advantage of the

tax deferral for three years then leaving town in the fourth year, a concern

of council member Pierre Rochman, saying the company would likely be so well

established it would want to stay.

"The long-term plan is to look at the tax base in the future and try to

maintain a balance of growth between residential and industry, not a 50-50

balance, but a balance that would keep growth at a steady pace," she said.

"It's called progress."

The plan is not all give and no take. Newtown would have a significant

influence over the architecture and design of buildings. Under new employment

criteria, one full-time employment position would have to be created at the

site for each $100,000 of increased assessed value. However, Town Attorney

David Grogins has reportedly expressed concern about the legality of the

design and employment criteria aspects of the proposal, though most other area

towns have set those conditions.

Council member Melissa Pilchard said she's all for anything that can be done

to create jobs in the area. However, rather than having a large amount of

money deferred for each of the first three years, she said she'd rather see a

certain percentage deferred the first year, less deferred the second year and

even less the third year.

Mrs Stocker said other examples of incentives that can be offered on a local

level include infrastructure improvements, engineering assistance, waivers of

building permit fees, and the fixing of real estate and personal property

taxes.

According to the EDC, the majority of the major towns and cities in

Connecticut have introduced programs to utilize this business development

incentive.

Connecticut General Statute 12-65B authorizes any municipality to enter into

agreements with property owners or lessees to defer taxes on construction that

meets certain criteria.

The Legislative Council is expected to fine tune the proposal in committee

before taking up the discussion before the full board.