PILOTs pave way for growth

51 tax agreements countywide bring in about $9.2M in taxes

— Municipalities are receiving $9.2 million in tax revenue through payment in lieu of tax agreements pioneered by the Schenectady Metroplex Development Authority, but the necessity of the tax incentives are debated.

Metroplex recently released a breakdown of the 51 PILOT agreements it administers throughout the county. This year, there are 27 PILOTS within the City of Schenectady totaling more than $5.13 million. The remaining 24 agreements fall within towns outside the city and account for around $4.1 million. The majority of PILOT projects, 42, were built on sites with empty buildings, vacant land, or formerly tax-exempt property.

Metroplex officials touted the revenues as a boon to taxpayers, and Metroplex Chairman Ray Gillen said such revenues have doubled since the last PILOT update released in February 2011.

“We do good projects and they create jobs, they bring investment to the county and they create tax base where there was none before in most cases,” Gillen said. “Next year these numbers will be even better than they are this year. We are adding buildings that have been off the tax roll for a long, long time … and putting them in to new tax paying, job creating projects ins our community.”

The agreements bring guaranteed revenue to municipalities, but typically at levels below a full assessment. A typical PILOT in the county lasts for 10 years and starts at a reduced portion of the full tax bill, and increases every year. It is a commonly used mechanism for attracting development, but also leaves tax revenue lagging behind.

That makes PILOTs a target of criticism from some corners. Republican Glenville Town Supervisor Christopher Koetzle has bemoaned the agreements as robbing revenues from localities. He is the only town supervisor in the county to express reservations about the agreements publicly.

“We haven’t really received much in additional revenue because of the PILOTs,” Koetzle said. “Generally speaking, the PILOTs are worth less than what the income tax bill would have been. … Without the PILOTs you would probably double that revenue.”

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