CRIZ: View Guidelines below to confirm this huge tax payer rip off

According to the City Revitalization and Improvement Zones Program (CRIZ) Guidelines, of which the most pertinent aspects are listed below, the state puts up $5 as a gift towards a project for every one dollar that the business owner or developer invests.

Much of the future tax revenue for state and city generated by normal economic growth in the zone is pledged to pay off bonds from which the proceeds are used for projects sponsored by governmental authorities, private companies or individuals.

The consequences;

1) The state and municipalities are deprived of the use of much if not all the tax revenue that is generated from future growth, since it is used to pay debt service on the bonds.

2) If sufficient added tax revenue doesn’t materialized to pay bond debt service, the city tax payers are on the hook to make up the shortage.

The theory is that these subsidies will cause new investment that otherwise would not take place. What evidence is there that they would not occur anyway in the natural course of events? It is no coincidence that the city “zones” selected are precisely where new development is anticipated.

The initial Lancaster recipient will likely be the Convention Center (small surprise), receiving $5,000,000 for renovation purposes. (The sponsors ‘forgot’ to set aside reserves for future major repairs and renovations In the original financial projections? Little wonder no solvent bank would finance it.)

There are four cities in PA now using or about to use CRIZ. More could be on the way. Each approved project will further deplete tax revenue to support government for current taxpayers, and our children’s and grandchildren’s generations.

In short, CRIZ steals from future generations to enrich special interests today! What was Lancaster State Senator Lloyd Smucker thinking about when he introduced this program?

The following description of CRIZ is excerpted from the NEWPACOM web site:

“The following state taxes will be detailed in the zone state tax reports as attributable to the zone:

1. Corporate Net Income Tax
2. Capital Stock/Foreign Franchise Tax
3. Bank Shares Tax
4. Sales, Use & Hotel Occupancy Tax
5. Employer Witholding
6. Liquor or Malt Beverage Tax charged on the sale of liquor, wine or malt brewed beverages in the zone by an LBC store or beer distributor.
7. Sales/use tax paid by a construction contractor on the purchase of materials used in construction in the zone.
8. Sales/use tax paid on the purchase of tangible personal property or services used exclusively by the business for activity in the zone.
9. Liquor tax on purchases by a restaurant or bar from an LCB store outside of the zone.
10. Malt beverage tax on purchases by a restaurant or bar from a Pennsylvania beer distributor outside of the zone.

6 . If the contracting authority does not repay the additional funds by the final bond payment date, the city, township, borough or county that created the contracting authority under Article II of these guidelines must pay the amount due to the General Fund plus a 10 percent penalty on the outstanding amount of additional funds.”