The Town Council scheduled a public hearing regarding tax abatement language for Monday, July 10 in the Weichsel Municipal Center at 7 p.m.
Tax abatement offers reduced taxes, granted by a state government or municipality, to encourage economic development. Southington uses abatements as an incentive to draw businesses into town and help them out financially in their startup years.
There are two major components to Southington’s tax abate plan. The first is the enterprise zone program. It’s a Connecticut state statute, so it cannot be altered. Enterprise zone programs are put in regions defined by the state as “distressed areas.” Certain tax breaks are allowed if a new property is created in these zones.
“When Pratt & Whitney vacated the town, it was 10 percent of our tax base, over 3,000 jobs and the multiplier effect of that,” economic development coordinator Lou Perillo said.
The second component of the tax abatement language includes businesses outside of the enterprise zone, which offers tax partnership programs, as well as industrial and manufacturing benefits.
The current tax abatement plans were only effective through July 1, 2017, so the proposed changes include amending the date to 2019. Whenever a change needs to made in ordinances, policies, or other town documents, a public hearing is required.
“We’ve seen some decent, good growth from our abatement programs,” Brian Lastra, director of assessment revenue, said. “In the top 30 personal property tax payers, we have 15 new tax payers on that list that weren’t here 10 years ago.”
Economic development coordinator Lou Perillo used local breweries as an example for this program. The businesses draw many customers from around the state, and by moving into places like Factory Square and renovating the space, it increased the value of the property.
With the tax abatement program, companies are exempt from paying 100 percent of their property tax for the first three years, 75 percent in the fourth year, and 50 percent in the fifth year. Their sixth year in business is when they would pay all of their property tax to the town.
Applications for the program must be made through the Economic Development department. The Town Council can approve or deny applications.
Proposed changes are listed online at southington.org. Aside from the date modification, some stipulations are proposed to be removed from the language, while others are added.
The Council will open their meeting on July 10 with the hearing, where residents are allowed to speak.
To comment on this story or to contact staff writer Jen Cardines, email her at JCardines@SouthingtonObserver.com.