*** Mayor Sorace’s “Report of the Mayor” to City Council last night
So, I have some good news and some bad news. Let’s start with the good news.
Yesterday we received word that the total amount of CRIZ dollars coming back to the city was approximately $6.4 million dollars which is $2.4 million more than last year. This is a huge gain.
The CRIZ program, as many of you know, allows us to keep state taxes and local earned income taxes and local service taxes paid by businesses in designated areas and [put] back into economic development and job creation in approved CRIZ districts.
Lancaster was one of the first communities to receive the designation and I like to think we have become an example of how this tax incentive can be successfully managed. And I want to thank those who serve on our CRIZ Authority for the years of work that they have put into this. And so one more time I just want to say these are state tax dollars that would normally be sent to Harrisburg that can remain in our local economy.
Now to the bad news – or – I don’t know – I’m going to remain optimistic. The state recently gave us..um…sent us a letter regarding a plan that we had talked about for some time – which was to provide small grants and loans to our smaller businesses. And so as part of this many of you heard me talk about this all of last year.
Our CRIZ dollars have been spent on these larger projects like the Conestoga Plaza, Marriott expansion, 101 North Queen, Hotel Lancaster as examples as well as two smaller business projects like Max’s Diner.
But where we are now is that instead of insuring that all shapes and sizes of businesses within the CRIZ district would share in the influx of money that the CRIZ represents, the state has rejected our plan for as long as this financial assistance program that would be administered by the very capable members of the CRIZ Authority.
The state believes that it would be inequitable to allow some businesses to receive and I quote, “direct benefit” end quote from the fund while, quote “others are required to repay increments used to support debt service” quote.
That is exactly the point of the whole CRIZ program.
They also pointed to programs like the Small Business Assistance Network as an existing resource for small businesses. Presumably they believe this program provides enough support for small businesses as is. And we respectfully disagree with this [base] interpretation of the CRIZ legislation and about the benefits the small businesses would receive due to our expansion of the CRIZ program.
It is crucial to me and others that all businesses in the Lancaster CRIZ district, no matter their size, share in the economic activity of the city and the CRIZ program.
So you haven’t heard the last about this. We will be talking to our friends in Harrisburg – at the Department of Revenue, the DCED and the office of budget as well as the governor’s office.
As you might recall, the CRIZ Authority was formed jointly between then Senator Smucker and Mayor Gray. Today I work in partnership with Senator Martin and he is aware of this. We will be figuring out what our next steps are. More to come.
In the meantime, $6.4 million dollars and 473 of the 546 businesses reported which was almost 87 percent which is the highest ever. So thank you to the businesses as well because I understand the paperwork is not very fun even though we do our very best to help you complete it.