Luzerne County Council set to vote on standardized tax break schedule

Luzerne County Council is set to decide Tuesday if it wants to set an advance schedule of real estate tax break percentages by project type — a proposal that prompted heated debate in June.

The issue is ready for a decision because council discussed and debated it in prior work sessions and heard arguments in opposition from Penn’s Northeast President and CEO John Augustine, said county Councilman Harry Haas.

Haas and several council colleagues have suggested the county should take a more proactive and planned approach by setting and publicizing acceptable discounts and fees for warehousing and logistics, manufacturing and tech-based development. Under the proposal, warehousing and logistics development would receive the least favorable break.

Because the schedule is nonbinding, council would retain the power to deviate from the stated tax break parameters based on the specifics of each project.

However, some council members have agreed with Augustine’s concerns that approval of a schedule — even if it is nonbinding — “threatens to derail the positive momentum that our economy is experiencing,” unfairly targets the logistics industry and could prompt prospective developers to automatically look elsewhere to more receptive areas that have no schedules.

If approved, the schedule would apply to breaks requested under the Local Economic Revitalization Tax Assistance (LERTA) program for blighted properties, most commonly applying to land scarred from past coal mining in the county. With LERTAs, the property owner pays real estate taxes on the land throughout the break and receives a discount on taxes for the new development.

The suggested schedule would shrink the break for warehousing and logistics development from an allowable decade down to five years, with a discount of 50% the first year and decreasing 10% annually to a final 10% off taxes in the fifth year. A development fee of $5,000 per acre also would be owed to the county, it said.

The discount for manufacturing and tech-based development would be 90% the first year and decrease by 10% annually to a reduction of 10% in the ninth year and then 5% off in the tenth and final year. Development fees would be $2,500 per acre for manufacturing and $3,500 per acre for tech-based development.

A county schedule would not apply to school or municipal real estate taxes because elected officials in those taxing bodies determine the structure of breaks they award for projects within their boundaries. Some county officials pointed out developers may be unaware of the distinction and wrongly assume a county schedule applies to all three taxing bodies, prompting school districts and municipalities to unknowingly miss out on development opportunities.

Tuesday’s meeting is at 6 p.m. in the county courthouse on River Street in Wilkes-Barre. Instructions for the remote attendance option will be posted under council’s public online meetings link at luzernecounty.org.