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Thursday, February 9, 2012

Pa. plan would limit tax giveaways for developers

PA General Assembly House Bill 2175  would limit the taxpayer-funded, debt-financed Redevelopment Capital Assistance Program matching grants for public and private developers, which spiraled to a cumulative total of over $4 billion under Gov. Rendell as they were used to help pay for the new Barnes museum, the Comcast center, hotels, public and private college buildings and hundreds of other projects, to a future cap of $3.5 billion, slowing the rate at which new projects can be added.

House Majority Leader Mike Turzai (R-Allegheny) was joined as sponsor by Rep. Mike Vereb (R-Montgomery) and at least one Philadelphia Democrat, Rep. Rosita Youngblood, who has criticized RACP use by the program's past master, Rep. Dwight Evans (also D-Phila.).

"The out-of-control borrowing and spending policies of the past just don’t work, and the growing RACP is saddling our kids and grandkids with a credit card bill which will last for at least 20 years to come,” Turzai said in this statement. 

"Created in 1999 with an initial debt ceiling of $1.2 billion, the RACP debt ceiling has been raised six times since then, pushing it up to $4.05 billion. There are approximately 8,000 RACP projects that have been added to the program’s list since 1999 ...  

"Turzai’s legislation would reduce the RACP debt ceiling, initially to $3.5 billion ... then, incrementally until it reaches $1.5 billion," and limits the program to “buildings and related infrastructure (i.e. roads, bridges, tunnels, waste disposal, storm water, sewage or water infrastructure; bridges or roads when part of an economic development project) projects with a total cost of $1 million or more (that) would generate or maintain substantial economic activity (e.g. substantial increases in employment or maintenance of tax revenues) and have a substantial regional or multijurisdictional economic impact."

Of course that's still pretty broad. Also, "projects on the current (RACP) list that have not been authorized as of December 31, 2011 would expire," though sponsors could re-apply. Plus the state budget office will develop a new "stringent review" for future RACP projects, which might trim the members-privilege character of wide-ranging RACP grants. Or maybe not.
Posted by Joseph N. DiStefano @ 12:20 PM  Permalink | 2 comments
Comments   
  • 0 like this / 0 don't   •   Posted 2:56 PM, 02/09/2012
    RACP is just another tax and spend vote buying scheme. . Any thing that makes economic sense will have banks lining up to finance it. The govt. financing private developers is corrupt crony capitalism that privatizes profits and socializes costs and losses.
    — dunce
  • 0 like this / 0 don't   •   Posted 11:38 PM, 02/09/2012
    This is state sponsored capitalism, which in contrast to private capital which seeks to overthrow government, is the only source of funding that will make economic sense now and in the future. WE can no longer trust wall street hedge funds to invest in America, Pennsylvania or Philadelphia. We have to do ourselves.
    — Fernando08


2 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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