Thursday, August 27, 2015

City Council to Consider $583,814 Solar Subsidy

During their September 1st meeting City Council will entertain a recommendation from the Development Corporation Board to provide a $580,000 economic development incentive to OE Renewables for a project that will add one long term job to San Angelo's local economy.  That's $73,000 per year in subsidy for a project adding a mere primary job.

The Development Corporation did not discuss how this project meets the city's criteria for tax abatement, as stated on the City's website::

Tax Abatements
The City of San Angelo and Tom Green County may provide personal property and real estate tax abatements for periods of 5 to 7 years. Abatement levels range from 20% to 75% and are determined by the number of new jobs created and/or the amount of new investment in the community. All companies receiving the abatements must meet the minimum job creation level of 5 new jobs and no less than $250,000 in new valuation in either real estate and/or personal property. Please note that tax abatements and rebates may exceed the percentages shown but must be considered on a case by case basis.

Businesses eligible for the tax abatements are manufacturing, warehousing/distribution centers, home/regional administrative offices, data processing centers, and telecommunications services. Tax abatements are not automatic; applications must be made to both the City Council and County Commissioner’s Court.
Maybe City Council will help the public understand why the city is making three exceptions.  One, the project is below the level of 5 new jobs.  Two, the term of tax rebates is eight years, exceeding the stated five to seven years.  And three, electric power generation is not listed as an eligible business.

If Council chooses not to illuminate these discrepancies, the solar power farm $580,000 subsidy will have been approved by two government bodies in less than seven days, a relative political flash of light.

Update 8-31-15:  The Standard Times noted this item will be on Council's agenda tomorrow but did not highlight the very temporary nature of the construction jobs provided by Ryan LLC, a partner for OE Renewables Texas LLC.  OE Renewables is providing one full time job for over $580,000 in public subsidy.

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