Development authorities say their assistance produces numerous benefits that far outweigh the cost of the tax breaks: permanent and construction jobs, higher property values generating higher taxes, increased spending by workers and visitors, and the possibility that a big project will ignite more development.So there are valid public policy reasons for the program, but the government isn't making any money.
Tuesday, December 2, 2008
An article in the AJC answers some of my questions regarding the county's lease-purchase program. Basically, the county gives tax breaks and acts as a bond issuer to help deals get financed. The mechanism for this is that the developer gives the county the land for a period of time and leases it back from them. My confusion earlier (and what prevented me from posting about this basic structure) was a comment that suggested that the Development Authority actually made money on these deals. The information I was able to find was incomplete, but this article makes it pretty clear to me that the Development Authority doesn't make any money: