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Nazareth, Pa., United States

Thursday, March 06, 2008

Corporate Welfare for Lehigh Valley Business

Having trouble making payments on your country club membership?

Considering selling that beachfront condo?

I've got good news for you.

Just relocate to a Keystone Opportunity Zone, and all your troubles will be over, bippy. Property owners, residents and businesses located in a KOZ pay virtually no local or state taxes. So who makes up the difference? Why, that's the rest of us, silly. We exist to serve the rich. And guess what? Governor Rendell actually wants to expand this program.

Unfortunately, some naysayers and obstructionists have blasted KOZ programs as "nothing more than corporate welfare for companies that would have built new local facilities and hired more people without tax breaks."

Don't worry. The boys at Blackwater have shot them.

But you may ask yourself, where can I find a KOZ? That's where the Lehigh Valley Economic Development Corporation can help. It actually has a site selector to help you find a place that's just right for you. Just remember to click the KOZ box.

In Northampton County, only two sites are available, Easton's rapidly sinking Riverwalk and the proposed Bangor Business Park, which has been in planning for the last gazillion years.

Boo!

But Lehigh County is another story, with fourteen different sites. Every single one is in Allentown, which is moving forward and in the midst of a renaissance and really, really safe, too. Really!

Yipee!

You can join other corporate welfare recipients at The Butz Corporate Center, The Plaza @ PPL Center and City Line to sneer at people who are forced to ride buses.

Over the last two years, Pennsylvanians have handed out more than $567 million in corporate welfare grants from the state general fund budget to politically connected businesses. Between 2003 and 2007, Pennsylvania ranked 38th in job growth, 40th in personal income growth, and 42d in population growth among the fifty states. Keystone Opportunity Zones have only helped the make the rich a little richer.

26 comments:

DemoThug said...

Ah, Bernie - doncha know that if we take care of the wealthiest among us, their largesse will trickle down and we'll all get to buy split levels in suburbia someday..

Ronald Reagan told us so.

DemoThug said...
This comment has been removed by the author.
Anonymous said...

It's late at night Bernie and those of us who think/write/laugh and return to your Internet space, can handle anything.

Can it be worse than what Bernie K spoke about?

Delete in the AM...

Anonymous said...

Bernie how can we fight it? The powers to be are part of the culture. Many of these high rollers are members of uber-elite Country Clubs like Saucon Valley.
The money guys are rubbimg elbows with members like publisher Till and County Council President Ann McHale.
What chance does the average schmooe have with connections like that.

Anonymous said...

How can we fight it?

First follow the money. Expose it.

Then start hammering legislators.

I supported this concept when Jack Kemp proposed it many years ago. But it was to bring jobs to really depressed inner cities.

Now it has turned into a political patronage system of rewards.

And why are residential units getting this benefit? That aspect of the law should be changed immediately. This should be for factories, stores, commercial operations only.

But I agree, there are too many KOZ's in the area. There should only be one. Develop that small area with commercial businesses. Then make a new one.

The other scandal I hear is that operating businesses keep getting extensions. This practice should also stop immediately.

Anonymous said...

we need to take a comprehensive look at economic development in the Commonwealth as a whole. Pennsylvania has many impediments to attracting business (e.g. state corporate income tax, crumbling infrastructure) that our neighboring states do not have. unfortunately, efforts to address these obstacles invariably prove politically unpopular (e.g., who wants to eliminate a tax, that generates very little real income for the state, on greedy corporations?) and are stillborn. as a result, we resort to piecemeal approaches, like the KOZ, that prove more popular to electeds because of the potential pork they represent.

Anonymous said...

As a matter of fact, stating that all KOZs in LC are in Allentown is not true. The Olympus headquarters is in a KOZ

Bernie O'Hare said...

Anon 8:12, The only KOZ properties that are available to an existing business in NC are the two I mentioned. That's according to the LVEDC.

Anonymous said...

re: anon 7:53

Nailed it. Across the board tax incentives/reductions instead of incumbent-protecting arbitrary handouts are more effective and equitable. Corporate taxes are directly passed to consumers and stockholders (and over 80% of us are stockholders in something) as an immediate reflection of corporations' cost of doing business. KOZ-like payoff programs simply bribe a concentrated portion of the very rich in order to protect incumbents. It's why incumbents love the immediate results of their walking-around-money handout schemes and hate the unwieldy nature of tax incentives. Perhaps they should all disappear.

Anonymous said...

You're all way off base with your viewpoints on KOZ. The whole purpose of the KOZ is to redevelop blighted/contaminated properties in cities rather than build up the suburbs (i.e cornfields). I work in the environmental field and can tell you firsthand that many of these properties have contaminated soil and/or groundwater and no viable owner to clean up the property. With the environmental concerns, it makes it impossible to develop the property.

The PADEP Land Recycling Program was partially established to help redevelop these areas known as brownfields. Offering tax breaks to a buyer is usually the only way a brownfield can be cleaned up.

Anonymous said...

I have to amend my previous post. The ORIGINAL INTENT of the KOZ was to redevelop blighted/contaminated properties in cities rather than build up the suburbs (i.e cornfields). I think it was wrong to give Olympus tax breaks to build in farmland.

Bernie O'Hare said...

Anon 9:22,

Dude, that's a garbage argument and you know it. Look at the KOZ maps. Some of those properties are brownfields. Very few. Was the Cinema Paradiso in a brownfield? The Majestic property in the slate belt? The Hotel Easton? Come on, who do you think you're kidding? And you haven't noticed the connection between businessses in KOZ areas and campaign contributions? Please.

I'll concede the brownfield point, but the KOZ exemption goes waty beyond that.

Anonymous said...

So you don't want to see Allentown redeveloped? You would rather have new businesses built in the suburbs? Your kidding yourself if you think Allentown and Easton are going to go through some sort of renaissance with help in the form of tax breaks. Who in their right mind would move a large business to Allentown without some sort of incentive. Same with the Bangor/Majestic Park.

Explain to me how the Cata Garment Building is about lining somebody's pockets and not about redevelopment of the city?

Bernie O'Hare said...

Who in their right mind would move a large business to Allentown without some sort of incentive.

And as soon as the tax incentive is gone, the business will disappear, too. case in point, Majestic. When their KOZ expires, that outfit intends to move ... to the 'burbs.

Anonymous said...

mayor ed said that the (koz) section of downtown allentown is going to be renamed the ''Renaissance Square''

...complete with daily jousting knight performances

Bernie O'Hare said...

During the Renaissance, political dissidents were routinely disemboweled by Edward Longshanks.

Looks like it's time to move again.

Anonymous said...

Majestic Athletic is not in a KOZ. KOZ's were enacted in 1998 and Majestic was founded in 1976.

I don't get your viewpoint...explain to me how KOZ areas and campaign contributions are related.

Anonymous said...

in the center of the "square", you'll be able to view the political dissidents who shall be sentenced to imprisonment in either the soak-a-bloke or drench-a-wench.

Bernie O'Hare said...

Majestic was placed in a KOZ in the 2000s. It was either that or they'd leave. I remember that. I remember speaking against it.

Look at who is in KOZ tax exempt properties and then look at who donates. They're all there.

Bernie O'Hare said...

Anon 12:40, I know that Majestic was gicven permission to apply for KOZ status a few years ago. I remember that clearly. but I don't see its name listed anywhere as a KOZ property. You may be right and I may be wrong. It might have been some other tax incentive.

Anonymous said...

"During the Renaissance, political dissidents were routinely disemboweled by Edward Longshanks.

Looks like it's time to move again."


A classic! Beatings will continue until morale improves!

Bernie O'Hare said...

Anon 12:40,

I checked into my earlier allegation about Majestic and we're both right. Majestic was granted a KOZ just afew years ago, but it only applied to its expansion.

Anonymous said...

Do you mind providing the link for Majestic filing. I was curious and couldn't find it.

Bernie O'Hare said...

Although this info may be posted on the state DCED site, I could not find it there. So I called NC's DCED (610.559.3000) and John Kingslet from that office confirmed that the Majestic expansion was placed in the KOZ.

michael molovinsky said...

imagine having an employer with over 200 jobs smack in the middle of allentown at 7th and linden, there for decades, with absolutely no incentives. then imagine taking away their safe, convenient parking to build townhouses when there is no demand for such housing, and the schools are already maxed out beyond capacity. the characters in this absurd scenario are Verizon telephone, Allentown Parking Authority and Ed Pawlowski

Scott Armstrong said...

Mike,

You are absolutely right; judged by its current configurations and actions Allentown is insane. Now we are to believe the mayor, by mere decree can designate a Renaissance.

Scott Armstrong