READING >> Berks County Commissioners passed a motion Thursday that would rubber stamp LERTA tax abatements throughout the county.
The motion passed 2-1, with Commissioner Mark Scott voting no.
“The theory goes that by offering this kind of tax incentive and temporary abatement, so much additional constructions will take place that it will offset the cost. That is a statistic that has not been proven,” Scott said. “I am a little more skeptical of this and not ready to approve this at this time.”
LERTA, or Local Economic Revitalization Tax Assistance, allows commercial or industrial newcomers to be taxed on the assessed value of the property upon purchase, and phase in the taxes on improvements made to the property over ten years.
The assistance has to be approved by the municipality, the county and the local school board. Berks commissioners passing the resolution at the Thursday meeting of the board would remove one step from the process, as county approval would be automatic if the other two entities agreed.
“I think this is good for our county. It is very important when you look at the recent planning commission study, that compares Berks’ property tax, that had the highest overall tax impact,” Commissioner Christian Leinbach said. “When you look at Montgomery Count and Chester County and Lancaster, the difference is a much more robust commercial and industrial tax base. I believe we need to do what we can to expand.”
Leinbach has been a proponent of LERTAs, even including the assistance in his platform for reelection. In a speech announcing his bid, he said, “Unlike many programs it does not take money from one group of people and give it to another.
“Instead a business would continue to pay their normal tax rate but when they complete a new project and it is assessed for property taxes, they would pay zero new taxes year one, ten percent in year two and so on until they are at 100 percent in year eleven.”
Commissioner Kevin Barnhardt, however, needed some convincing.
“Initially I was against this but now I think it makes sense,” Barnhardt said before voting for the resolution. He went on to say that it was not necessarily a permanent fixture.
“Certainly we can look at this over the next couple of years that we can see if it is working or not working, but it is one of the tools that we have in the tool box,” he said.
Scott said that taxes were not the only factor that influenced businesses’ decisions to move to an area. He listed availability and cost of labor, local resources and the availability of shovel-ready properties as other factors.
He added that municipalities may feel pressured to approve a LERTA locally, once the county has approved them.
“Those are my principal reasons for my opposition, so I wish to be recorded as a no,” Scott said. “But I understand and appreciate the reasons for those who agree with it.”
