New Abatement Article

The New York Times has a good article on tax subsidies and abatments poaching from the high-tax climate of New York. Interestingly, one of the main opponents to big abatments is Kevin Gillen of Econsult.

The juxtaposition of comments

from the Times article here:

“Propping up the big guys and helping them stay big doesn’t really promote economic growth,” said Kevin C. Gillen, an economist at the Wharton School of the University of Pennsylvania. He said much job growth comes from small businesses and fledgling companies.

Multiyear tax-abatement programs are often ineffective, Mr. Gillen said, because “they tend to work a lot better in the short term than the long term and often wind up being used to retain employers rather than to attract new firms.”

versus the analysis about Philly's abatement program here is interesting:

The bulk of the abatements has gone to big developers, landlords, and upper-income residents. The condos and homes that qualify are, on average, worth four times as much as the typical Philadelphia residence and are concentrated in affluent areas such as Center City, Queen Village and Northern Liberties.

Developers and landlords own $1.6 billion worth of abated real estate, more than all other abated properties combined. They are the program's staunchest champions.

Some national abatement researchers say the city is giving away the store to the wealthy.

"Philadelphia is being overly generous. It makes absolutely no sense," said C. Kurt Zorn, an Indiana University professor who did a national study of abatements in 2005.

Arguably though Gillen could be saying that large multi-layer tax subsidies in the tens of millions to one company doesn't make sense, whereas property tax abatements focused on individual addresses has reaped significant benefits for the city (in non-monetary ways).

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