How not to try to attract industry

The Lincoln Institute and the Minnesota Center for Fiscal Excellence jointly publish an annual report comparing property taxes among the 50 states.

The report for the 2018 tax year is out.  You can see the whole thing here.

This year’s report lists El Paso as having the highest property tax rate on industrial properties of the top 50 cities in the United States.

The report shows three breakdowns: smaller industrial firms (land and building value up to $100,000), mid-sized firms (land and building value up to $1 million), and larger firms ($25 million).

We had the highest tax rate in all three categories last year.

Is this the way to attract industry?

We will probably read some comments about the local governments granting tax abatements to incoming industrial firms.  Remember that those abatements have a finite life.  After that the firms end up paying the regular tax rate.

The people that operate those firms have to pay property taxes on their homes, or if they are carpetbaggers through their apartment rentals.

We deserve better

Brutus

10 Responses to How not to try to attract industry

  1. Anonymous says:

    Yep, and as someone who has relocated several times for jobs and also been part of corporate site selection, I can tell you that property taxes get evaluated as part of those decisions. I pay more in property taxes here than I paid in combined property and state tax in California on a comparably priced home with similar total income levels. Of corse, Cali had prop 13 which froze property tax at the level you paid for the house so that folks didn’t get priced out of their homes when property appreciated rapidly. And since property value appreciation fluctuated with bubbles that could drop value as fast it went up, it also meant homeowners weren’t paying taxes on property value that they’d never realize.

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  2. JerryK says:

    Someone has to pay for all those subsidies and abatements the city gives to our local billionaires and businesses. You and I have been designated for that honor.

    Like

  3. Rico Suave says:

    Besides our High local taxes there is the lack of WATER Factor…

    Like

  4. Hands That Giveth and Then Taketh Away says:

    Here are two quotes from a news release issued by Hunt about the shiny new Hunt Weststar tower going up downtown. In it, Josh Hunt and Dee Margo talk about increasing the tax base and decreasing the tax burden on residential taxpayers, but they never mention the nearly $20 million in tax breaks Hunt was given by the city and county.

    $$$

    “We are proud to be breaking ground on WestStar Tower today for what we know will be a signature development for El Paso,” said Josh Hunt, Executive Vice President of Hunt. “This project signals continued investment in downtown El Paso’s economic revitalization, an increased tax base, and a competitive business environment for El Paso.”

    “Diversifying our local economy is pivotal to the long-term success of El Paso,” said Mayor Dee Margo. “Today’s groundbreaking is another step toward decreasing the tax burden on residential taxpayers while increasing our commercial tax base. Not only does WestStar Tower align with the City’s initiative on downtown revitalization, this development will be key in attracting new companies to move and invest into our community.”

    $$$

    Tax dollars are subsidizing about 30% of the building cost. Josh Hunt said they couldn’t afford to build it without money from the both the city and county.

    https://www.businesswire.com/news/home/20180621005669/en/Hunt-WestStar-Break-Ground-High-Rise-Project

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    • Anonymous says:

      Basically, businesses already operating in other parts of El Paso will be moving to a taxpayer-incentivized building downtown. That isn’t diversifying anything, nor does it relieve residential taxpayers of the burdens Hunt and other big donors have already loaded on them. And, btw, when any out of town potential tenants discover that I-10 Connect will be disrupting traffic into downtown for the next 4-5 years, I suspect that will make them question the wisdom of moving downtown. I’m glad I didn’t move my bank accounts to WestStar. Any business that only has one location downtown won’t be getting my business. Freeway construction has made me totally disinterested in any travel east.

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      • Anon says:

        Weststar has other locations across the city.

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        • Anonymous says:

          Read the article, they are consolidating them in the downtown tower.

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          • Anonymous says:

            My bad, WestStar is actually just consolidating the four they have downtown. But to my earlier point, existing businesses closing locations to move to the tower is not diversifying our economy. It is just shuffling things around.

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  5. We're #2 !!!! says:

    El Paso now has the second highest Apartment Property Taxes for the Largest Fifty U.S. Cities. City council reps and the city manager are probably doing fist bumps to celebrate the big move up from #5.

    Like

  6. Old Fart says:

    BRUTUS: Thanks for the helpful and interesting website.

    Like

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