Payment in Lieu of Taxes or Just Don't Pay At All (not delivering on promises)

This blog will concern itself with the March 27th article in the Commercial Appeal regarding Shelby County and its use (or abuse) of the PILOT program. The article stated that the Shelby County Commission recently voted on concerning the use of the "Payment in Lieu of Taxes." Local government typically uses this program to lure prospective companies from locating and doing business/creating jobs within the county while freezing its tax liabilities for an established amount of time with the agreement that the benefited company would create jobs and an acceptable salary/pay range for those jobs and thus benefit the economic impact for the county. While this program from its definition should spell a win-win situation for the county, the ugly truth is that the program is grossly taken advantage of with little oversight or consequences....Until now. The commission voted 12-0 "to alter the program to ensure better oversight and require companies seeking public funding to pay higher wages." While it does erode the potential tax base, the program is essential for the city and county to compete with other cities and counties. The new measures voted on included:
(1) companies offering medical benefits with targeted wages $12 to $15 (with new employees making $10) per hour.
(2) competitive site-based test requiring companies to demonstrate why public investments is necessary to stimulate public growth
(3) Tougher compliance measures, including random site visits to make sure companies are living up to their commitments
(4) 75 percent of employees must live within Shelby County
(5) to make the IDB's Jobs Plus program mandatory. (Jobs Plus is designed to give local minority, women-owned and small businesses a chance to do business with companies seeking PILOTs)
The issue that I have regarding the use of the PILOT program is simply the non-compliance issues. It is frustrating to know that the program lacks the teeth needed to ensure that companies comply with their agreements in order to gain the much desired tax freeze that ultimately saves that company millions while potentially costing the local government asizeable addition to its tax base. Only time will tell if these new proposed rules will have the teeth needed to ensure compliance or not. Much to come on this debated program.