School District Lawsuits Costly and Counterproductive
Mount Vernon Needs More Development and Less Litigation
Economic Growth Helps City and Schools
The Mount Vernon School District has filed yet another lawsuit against the city’s Industrial Development Agency (IDA) and residents. This is the second suit against the IDA and the third involving the city. Residents need to know the actions are without legal merit, a waste of tax dollars benefitting only the school district’s lawyers bringing these cases, and an assault on the future of our city.
To prosper, Mount Vernon needs to grow. Stagnation is the enemy. Vacant buildings and boarded up store fronts fester and multiply into problems that only get more difficult.
Our objective is to expand the tax base by making Mount Vernon business friendly and a destination for jobs. One of the tools the IDA uses to do that is to partner with developers by offering tax incentives, where risks and rewards are shared. The incentives, known as payments in lieu of taxes or PILOTS, lower the developer’s costs, providing an incentive to take on riskier projects.
The school district’s latest lawsuit essentially boils down to two complaints. The IDA did not have the authority to offer tax breaks to the Enclave development on Macquesten Parkway in Fleetwood because the 179 units will be offered at market rates and the amount of tax breaks wasn’t justified.
Wrong on both counts.
The IDA operates under rules set by the state. Those rules require the IDA to adopt a Uniform Tax Exemption Policy (UTEP). The UTEP adopted by the IDA under the state rules provides wide latitude for selecting projects, including market rate developments, that qualify for tax breaks. The IDA followed all the rules. The IDA has even engaged an outside consultant to justify the amount of the tax breaks. The analysis by the consultant, Urvashi Kaul, an adjunct professor at Columbia University, found that even with the tax breaks that Enclave project would have a positive financial impact on Mount Vernon.
That should come as no surprise. For starters, the $48 million Enclave project will generate almost 200 construction jobs. The people who live there will energize the local economy. Their buying power can then attract new merchants like a Trader Joe’s or other supermarkets and stores.
Economists call this creating a “virtuous cycle.” But the cycle doesn’t just happen. It needs a catalyst to spark development and that’s the job of the IDA. It also needs smart government to reduce the burden on homeowners like the steps the city is taking to increase our sales tax revenue from an average of $17 million per year to more than $25 million per year. The logic is simple; the more we grow sales tax revenue, the less we need to rely on property taxes.
What it doesn’t need is road blocks in the form of constant lawsuits from the school district.
The City of Mount Vernon certainly understands the financial pressures the school district is facing. The city faces the same ones every day, and they are likely to get worse as the new federal tax laws reduce state and local tax deductions. But the answer is not to fight — and waste money on costly and counterproductive litigation — battling over a shrinking pie.
The answer is to take positive, productive steps to build up our local economy, which benefits everyone. My hope is for the city and school district to end the legal wrangling and start working together on moving Mount Vernon forward.
Originally Published in The Westchester County Press — January 30, 2018
