Wednesday, May 2, 2007

Tax Abatement Debate

The PG covers the city council tax abatement debate.

Pittsburgh City Council held a public hearing yesterday on the merits of a property tax abatement plan that Mayor Luke Ravenstahl proposes to offer housing developers over 10 years Downtown and in 20 other neighborhoods.

Numerous representatives of the 21 neighborhoods and developers lauded the proposal while advocates of excluded neighborhoods took umbrage. Councilman Jim Motznik said his whole South Hills council district was excluded "and needs a shot in the arm."

Others questioned the criteria that included neighborhoods that have some momentum over those with none. Josette Fitzgibbons, a principal planner for the city, said two criteria were used. One was neighborhood ranking based on a vitality index of 11 indicators, a system that resulted from a year of neighborhood analysis. The other was sluggish property investment.

Council's next move will be to schedule a preliminary vote on the matter.
So, the 'vitality index' does seem to indicate a fair and systematic approach in offering abatements to neighborhoods. I did not attend, nor did I watch (I don't have Comcast! rrrrrgh - shouldn't these be taped and posted online?), the council debate the mayor's plan so I can't put these critiques in context of the entire debate.

While the 'vitality index' seems reasonable, there is no indication that it is a validated approach to successful tax abatement. 'Successful', or the targeted goal of this tax abatement attempt, is centrally defined by an increase in investment in residences within the city and, therefore in 10 years, an increase in city revenues generated from property taxes. I'm missing the indication that a 'vitality index' accomplishes this goal. Peduto's plan specifically targeted downtown and neighborhoods that have a high likelihood of accomplishing that goal, build on strengths that already exist in those areas within the city, and decided upon by an 18-member team including real estate experts along with other stakeholders affected by tax abatements.

The fact that Motznik raised some concerns with the proposal raises a red flag for me. By providing some resistance he accomplishes two things. First, he shows his constituency that he is arguing on their behalf (which may or may not be the case). Secondly, he seems to be giving some resistance to Ravenstahl's plan and displaying distance from Ravenstahl (which we know isn't really the case) while giving the plan legitimacy in the sense that MLR's yaysayers aren't just going along with it. Sort of like "creating a challenge" that MLR must struggle to push through council. Motznik did this before (for the emergency preparedness plan) feigning rough and tough headbutting with the administration but really just acting to give an air of legitimacy in an otherwise yaysaying pro-Luke council.