Image Credit: Chattanooga City Council & City Boards / YouTube
The Tennessee Conservative [By Adelia Kirchner] –
On Monday, the Chattanooga Industrial Development Board (IDB) deferred consideration and potential adoption of a new Payment in Lieu of Taxes (PILOT) policy.
Currently, PILOTs are approved by the IDB and go on to get final approval from the City Council.
This new policy would set a standard matrix for future PILOTs, removing the need for City Council approval on most, with the exception of larger ones set to last a longer period of time.
“If there’s a type of project that we all agree on as community members and as government, that would be good for the community,” stated Mayor Tim Kelly’s Senior Advisor for Economic Opportunity, Jermaine Freeman, “let’s have a policy that basically says ‘this type of project can go ahead and sort of be accelerated through the IDB’s approval’ without sort of the politization that comes with taking every project to city council.”
Under this new policy, PILOTs would be presented for projects adding at least 100 jobs to the community.
Additionally, manufacturing projects would need to be at least $20 million and office projects would need to be at least $5 million. Tax breaks for these projects would be set at 100% the first year, 75% the second, 60% the third, and 50% for subsequent years.
Project proposals would be brought before the IDB for a public hearing, and an affidavit would be required confirming that the project will not go forward without the tax break.
The IDB was scheduled to vote on the new PILOT policy during their October 2nd meeting, but Freeman requested that the board defer consideration of the policy until Monday, January 8th, 2024, so that there would be more time to “engage with community members.”
These “community members” would include the chamber of commerce, the county, the city, and other community partners who have not had the chance to be involved yet.
This is the potential downfall pointed out by Tennessee Advocates for Freedom, who wrote, “Pay attention to what they are trying to decide. Businesses paying getting tax waivers under certain conditions. I wonder if they might also be donors into their coffers.”
The parties being consulted here are not necessarily constituents or their elected officials, but are instead businesses.
Based on this new timeline, it is anticipated that a final draft of the PILOT policy will be available to board members by December, giving them time to review the policy before voting on it in January.
If the IDB passes the policy, it will go before the city council for review and potential adoption.
“We are the stewards of taxpayer money,” Freeman noted, “when you abate taxes there’s obviously an impact on the city’s general fund, but we also want to be responsive to the needs of being able to create an economic environment in which companies that are growing here, or companies that are choosing to relocate here, feel like they can do that and that we can be competitive with other cities.”
There are currently no PILOTs that will be considered by the IDB before they vote on the new policy in January.
About the Author: Adelia Kirchner is a Tennessee resident and reporter for the Tennessee Conservative. Currently the host of Subtle Rampage Podcast, she has also worked for the South Dakota State Legislature and interned for Senator Bill Hagerty’s Office in Nashville, Tennessee. You can reach Adelia at adelia@tennesseeconservativenews.com.
