The Erie County Council must now approve an extension of the tax relief program, which is critical to residential and commercial development throughout the city
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The Erie School Board has approved expanding a citywide tax abatement program considered important for residential and commercial development.
On Wednesday evening, school directors approved an extension of the city’s local economic stimulus tax relief program by five years, until July 31, 2029.
LERTA grants 10-year property tax reductions for new construction or modernization of residential/commercial properties throughout the city.
Why was the extension necessary?
The City of Erie’s LERTA ordinance included what’s known as a sunset clause, meaning that citywide LERTA tax breaks will expire on July 31 unless the three taxing entities that signed it – the City of Erie, Erie County government and the Erie School District – agree to extend the program.
The Erie City Council approved a citywide expansion of the city’s LERTA program in June 2019, and the changes went into effect in early July of that year. The school district and county government also approved.
On July 17, the City Council approved a five-year extension of the LERTA law, which provides for a 100% reduction in city property taxes for residential and commercial properties for 10 years.
As part of the citywide LERTA agreement in 2019, the school district agreed to a ten-year 100 percent school tax abatement for residential properties and a ten-year 80 percent abatement for commercial properties.
The extension approved by the school board on Wednesday maintains these discounts.
Impact of LERTA
Mayor Joe Schember called LERTA a success, saying it has sparked nearly $320 million in commercial and residential development within city limits, including the waterfront, including more than $50 million in residential real estate investments.
Before the changes, the tax reductions under the LERTA were initially 100%, but were staggered and only applied to properties in the LERTA target area, i.e. primarily in the city center.
Erie Schools Superintendent Brian Polito said a school board subcommittee recommended the extension to the full council. Polito also supported the LERTA extension, saying it could bring the school district up to $3.6 million in recurring annual revenue.
Next: Erie County Government
The Erie County Council must also approve the LERTA extension.
Rock Copeland, Erie County Councilman and chairman of the board’s finance committee, said he expects final passage of an extension of LERTA no later than Sept. 17.
Local officials said current LERTA projects will not be affected by extension permits issued after the July 31 expiration date. They advise people who wish to submit new LERTA applications to wait until the County Council gives final approval for the LERTA extension.
Contact Kevin Flowers at [email protected]. Follow him on Twitter at @ETNflowers.
