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May 24, 2005
Flying Solo With PILOTS
Eugene W. Harper Jr. on whether mayoral control of payments in lieu of taxes is a good thing
Harper's opinion piece in the NY Sun (May 18) is a comprehensive definition and history of PILOTS and Bloomberg's attempt to retain control over the fund to finance pet projects.
PILOTS are “payments in lieu of taxes” made by occupants of real estate not technically on the tax rolls to compensate for loss of ordinary city revenues — sometimes by taxexempt government units, like the Port Authority; more frequently, by taxpaying companies with deals under a program for “economic development.”Typically, the city takes title to property, removing it from the tax rolls, then “leases” back virtual ownership to the company, which agrees to make payments “in lieu of” taxes, usually less than taxes otherwise due. For example, the city may use PILOTS to permit a company to pay a slidingscale percentage of full taxes over several decades, and in doing so, retain (or attract) businesses otherwise threatening to leave town (or not come), owing to high city taxes.
Posted by lumi at May 24, 2005 9:19 AM