Friday, November 14, 2008

Elederly Housing Complex Wants Full Tax Freedom Too

Instead of screaming the tax freedom for some for ten years or 12 years is unfair to everybody else who has to pay at threat of fines, or loss of property, a Housing Authority Director, wants it too, for a residency rental complex.

Meanwhile, the rental complex itself received ten years of high subsidies from the federal government in Section *8 funding, and in the form of a county 'donation'.

These people have no idea where the money they want actually comes from.

Other taxpayers in the county or the city, school district, and county!

Yet our legislator from the 51st representative district who railed against tax freedom for his opponent, knowing of the unfairness of KOZs actually went ahead and voted for extending KOZs in the last session of the Pennsylvania General Assembly.

On a recent talk show program, Let's Talk, (Pennsylvania) state Representative Timothy Mahoney (D-51st District), before the November 3 election, said in response to why he ok'd the expansion of the state-wide KOZ program, (another 10-15 years) - it's working?

He wasn't asked where in the state of PA the KOZs have worked as intended, or if the program of tax exemption for ten years was working anywhere in Fayette County.

Can you believe, the host of the program, who was listening to Mahoney rail against his opponent, (Gearing, mentioned in the following article), state the way his opponent was using the combo KOZ and federal Section 8 Housing vouchers was for his own gain, did not ask Mahoney, uh Tim, my friend, can you give us examples of how KOZ has been working in Fayette County?

If according to Mahoney, KOZ designation for Gearing's property wasn't working as the program intended, but the program is working, Mahoney at the least should have been asked point blank, where in Fayette County are KOZs working as intended?

Just a couple of examples?

Maybe Mahoney would have answered, the (Duke Energy) power plant.

Yep that one received tax freedom in KOZs designation for ten years,back in 2000, and is not only an energy plant - its ownership is a Fortune 500 Company. Nobody knows whether the Fortune 500 Company would have located in the county anyway because Fayette's taxes are historically low in relation to its neighbors and the rest of the country by virtue of its designation as perpetually distressed.

Still distressed after some 30 years and more of grants, low interest loans and other mechanisms to bolster so-called economic development.

So a Fortune 500 Company comes into these distressed areas, gets the tax freedom for some amount of time, employs a handful of people for that period of time, and voila, after the tax breaks lapse or time out, they usually historically have left the area, for good.

That might not happen with this one, but nobody knows for sure.

And with the state legislative action to renew and expand the KOZ program, the same company may find it can simply apply again using the threat it will be moving since the grass is always greener elsewhere.

What a sad game.

Sadder still is most people don't appear to care that they have to pay another's share of the taxation imposed on them because the government entities have yet to scale back operations.

In fact, the city of Uniontown is in near-bankruptcy and needs every dime it can scrape together. It's likely they'll raise taxes on everybody else except those located in Keystone Opportunity Zones, or receiving LERTA.

The county of Fayette needs to come up with at least a million sometime in the next year to pay for retirement fund benefits. And more. They may have to raise taxes as well.

Yet none of these officials see the lunacy of allowing the tax freedom for some at the same time they are about to raise taxes for everybody else? Especially property taxes which if a business owner or residential property owner doesn't pay up when due, the property is taken away from them.

Not so KOZ residents and businesses.

Therein is the unfairness. Instead of begging yet another housing establishment whether non-profit or profit receive tax freedom itself, the Housing Authority Director should request the KOZ program be denied from here on out.

so too should taxpayers revolt when their taxes go up in addition to having to pay their own share they'll have to pay for others located in the tax free zones or owning property in such zones.

Net the Truth Online

Housing authority discusses Heritage apartments situation
By Amy Revak, Herald-Standard
Updated 11/14/2008 12:15:29 AM EST
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The executive director of the Fayette County Housing Authority Thursday explained the housing authority's role in a proposal by The Heritage apartments to make payments to the city of Uniontown in lieu of real estate taxes, saying the housing authority didn't initiate the deal.

Authority Chairman Harry Fike broached the subject, saying he couldn't understand how the Fayette Building in downtown Uniontown has tax-free status and The Heritage must pay taxes when both buildings house people who utilize Section 8 vouchers.

Fike said he attended Wednesday's council meeting - not as a representative of the housing authority, but because his brother, Ed Fike, is the mayor of the city. Harry Fike said one of the council members accused the housing authority of trying to put the city out of business.

"We had nothing to do with The Heritage. They were asking for help," Harry Fike said.

On Wednesday, Uniontown City Council voted against a proposal for The Heritage to pay $5,000 to the city next year in lieu of the $17,000 in real estate taxes it would owe the city next year.

Thomas Harkless, executive director of the housing authority, said a nonprofit corporation owns The Heritage, which is home to 36 low to moderate income people 62 and older, and it was built using tax credits. He said because the building houses low to moderate income people, market rate can't be charged for rent, and the rental charge is 30 percent of the person's income. He said for the first 10 years after construction, the county paid an operating subsidy of $36,000 that was used for property taxes but the agreement is over and now there is a shortfall.

Harkless said because of the shortfall the nonprofit agency that manages The Heritage approached the housing authority to seek operating subsidy to help the property stay in business. He said all housing authority property is tax exempt, but money is provided in lieu of taxes.

Harkless said the housing authority agreed to pay $225 per unit per month and was also asked to sign a cooperation agreement that calls for a payment in lieu of taxes.

"The housing authority is trying to keep 36 elderly residents in apartments," Harkless said. He added that the housing authority heard the next year, which is seven weeks away, the building will default.

He said about eight residents of the Heritage use Section 8 vouchers, which provide more money for rent, but the determination about where people who have Section 8 vouchers live is at the discretion of those who hold the vouchers.

Harry Fike pointed out that Gary Gearing, the owner of the Fayette Building, which is in a Keystone Opportunity Zone, also received government money for having Section 8 apartments in the building.

Harry Fike pointed out that Gearing has received $152,000 and still doesn't pay taxes on the building.

Harkless said The Heritage would need all the residents of the building to utilize Section 8 funds to stay solvent, but there is a waiting list of two years for vouchers.

He said there are two buildings directly across the street from each other and one pays over $40,000 in taxes and is 100 percent residential and the other is commercial and residential and pays no taxes.

"The building that is for the community is getting crushed and the building that is for personal gain is doing just fine," Harry Fike said.

Harkless said he couldn't tell people with Section 8 vouchers where to live.

Harry Fike said Gearing made promises when he was granted the 10-year KOZ status that he never really carried out.

When Gearing obtained approval for the tax-free status from the city, county and school district, he said it was to attract businesses to the building.

"He is filling it full of HUD (U.S. Housing and Urban Development) people and that wasn't the promises made," Harry Fike said.

Harkless said this isn't a new issue, as the KOZ has been around for a while and the idea is to spur business.

Attorney Cara Davis said the city would have had to approve the KOZ status. She said, depending on the law, the city may have a remedy to go after tax money the city lost if the owner was non-compliant with the terms of obtaining the KOZ.

Harry Fike said it is ironic that the council member that yelled at him was on the board that approved the KOZ for the Fayette Building, "and I'm the one catching the heck."

"The housing authority didn't present this problem," Harry Fike said.

Harry Fike also mentioned that some Section 8 tenants have complained about conditions of the Fayette Building, and Harkless said inspectors could be sent to the site to ensure it meets specifications. ..

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