AFTON – There’s no harm in a private company asking for a tax break, some Afton residents say, but there is harm in an unelected body giving one to a company that doesn’t need it.
Others argue that if such an incentive can create and maintain jobs, it’d be harmful to a community not to offer one.
“We need the jobs,” said Afton tax payer Matt Guokas. “This is a useful tool to create jobs and maintain jobs.”
Wagner Lumber, an Owego-based company looking to purchase the Pomeroy saw mill in the Town of Afton, is requesting a tax abatement from the Chenango County Industrial Development Agency. Commonly known as a payment-in-lieu-of-taxes (PILOT) agreement, the deal would save the company roughly $161,000 in sales and property tax over the next 10 years.
The IDA is likely to vote whether or not to grant Wagner’s request at its monthly meeting this morning.
At a second public hearing Monday night on the issue, Afton town board member Mary Jo Long said it’s alarming that such deals can be granted without authorization from the town’s citizens or elected officials.
“Who should decide these kinds of questions?” asked Long. “It should be a decision made by people and their elected officials, not an unelected body like the IDA is.”
The IDA, a board appointed by the Chairman of the Board of Supervisors, is authorized by the state to grant such tax exemptions without public vote to industrial businesses that it judges will create or retain jobs.
Wagner says the purchase hinges on whether or not the IDA approves the PILOT.
“Right now we are experiencing severe economic conditions,” owner Les Wagner said Monday, explaining that a decline in the new housing market has meant a decline in demand for hardwoods. “In these conditions, it’s about efficiency. A bit of a tax break would be tremendously helpful in getting us started and giving us a good foothold we need.”
Wagner claims he will expand the current Pomeroy operation and keep the 27 people current employed at the saw mill, which has struggled to stay open since flood damaged the property in 2006. The company also plans to add nine more jobs over the next two years, he said.
If approved, the abatement would relieve Wagner of $37,000 next year and increase the tax rate $.31 per $1,000 of assessed value for Afton residents, according to estimated county tax figures.
Around 50 people attended last night’s gathering in the Afton Village Library. Several questioned how the IDA decides if a businesses gets tax relief, and if Wagner, which has two other operations in Owego and Cayuata, deserves one.
“Did the IDA audit Wagner’s books? We need to get the black and white picture,” said Pam Wylubski. “This decision is not about keeping jobs. It’s about whether or not this company needs financial assistance from taxpayers.”
IDA Director Maureen Carpenter would not say whether or not Wagner in fact needed the break to afford the purchase, and would not divulge any financial information.
“It’s their private business,” Carpenter said.
Others asked why only one member of the five-member IDA board, Hugh Kearney, was in attendance, and how could the board could vote today without hearing what the citizens of Afton had to say.
“I can’t say why the rest of the board isn’t here,” Kearney said, adding that board would be briefed on the comments this morning, and may or may not vote on the request.
Afton resident Mike Bernhard offered statistics from the state Comptroller’s Office showing that Chenango County’s IDA is one of few where jobs have actually been lost. He asked the IDA rethink its policies for offering tax breaks, suggesting that they implement job and economic performance requirements to make companies more accountable for the money they take.
“That would be reasonable,” he said.
Wagner has been operating the Pomeroy mill since floods knocked it out in 2006. Several Pomeroy employees said that by stepping in, Wagner saved their jobs.
“Without Wagner, my job wouldn’t be here today,” said Pomeroy worker Steve Wilson.
“Jobs are a difficult issue in Afton,” added businessman Bob Granger. “You can’t blame Wagner for wanting a tax break to make an investment to try and turn that around. This is isn’t being given to them, they are taking a financial risk to invest here.”
The IDA held a second hearing to gather comments on the issue following complaints that the required public hearing in September was not publicized enough and held at an inconvenient time (10 a.m. on a weekday).
With Afton’s struggling tax base, Long said that extra burden placed on taxpayers because of corporate tax breaks should be spent on more community-based initiatives.
“That’s money I think we all might want to spend in a different way,” she said, pointing out the local EMS shortage as one example of where tax money could be possibly be used better. “Use our money in a way that might help more citizens of Afton.”
Wagner has since offered to take over the mill for $1.525 million, and says it will create nine more jobs if granted the tax exemption.
The company would not be held to any performance requirements in exchange for the tax deal.
Wagner owns mills in Owego and Cayuta, near Watkins Glen and has a similar PILOT agreement with the Schuyler County IDA.