Pottstown School Board OKs tax break.

Votes by council and Montco commissioners will put LERTA on the books

POTTSTOWN >> The long road toward agreement on a tax break meant to encourage economic development passed an important milestone Thursday when the school board unanimously approved a resolution outlining its provisions.

The school board vote was the first of the three taxing bodies which must approve the measure for it to become law.

It is also perhaps the most important vote given that the lion’s share of a property tax bill in Pottstown is levied for school taxes.

Pottstown Borough Council has already held the required public hearing and is likely to approve the measure at its Aug. 8 meeting.

The Montgomery County Commissioners, the third taxing entity involved, have indicated they will follow the lead of the two local governments.

The tax break is called LERTA, which stands for Local Economic Recovery Tax Assistance and it does not reduce any tax revenues. Rather it delays the increase in tax revenues resulting from the improvement of property.

LERTA can be structured in a variety of ways and, after a committee of school board members and borough council people conferred over the past several months, it was agreed that Pottstown’s LERTA will have full tax assessments on improved property phased in over seven years.

Steve Bamford, the executive director of PAID, the borough’s economic development arm, said he is pleased that the incentive he initiated is nearing completion, and he said he appreciates the changes made as a result of collaborating with the school board.

He said having the LERTA in place — along with both the borough and the school district not raising taxes for two consecutive years — makes a better narrative when speaking with potential developers.

“It sends a wonderful message, that Pottstown is serious about addressing the impact of its taxes,” Bamford said.

“Every conversation I have with a potential developer or business, the subject of taxes comes up,” said Bamford.

“And although it always comes down to dollars and cents, you can’t underestimate the psychological value of saying taxes have stayed constant and there is a tax incentive so you won’t get hit with a big tax bill when you improve your property,” he said.

“Businesses like consistency, they like to be able to plan for things in advance, and real estate developers, more than most, don’t like surprises,” Bamford said.

The LERTA program contains some other unique provisions as well.

Owners in the program who make a commitment in writing to search first for borough residents to employ before looking outside the borough will see their assessment increase by smaller increments, although it will still reach 100 percent in year seven.

A property will be kicked out of the LERTA program, and the full tax bill assessed, if the tax bills and utilities bills are not up to date by the end of the year – as well as all other tax and utilities bills for any other property with the same owner.

Also, any attempt to appeal the assessment on a property during the sevenyear window in the LERTA program will immediately result in being kicked out of the LERTA program and the full tax bill being due.

School Board member Polly Weand, who served on the ad hoc committee that tweaked the provisions, expressed her gratefulness to borough council after the vote Thursday for inviting the school board to have a say in the specifics of the matter.

“Every conversation I have with a potential developer or business, the subject of taxes comes up.” Steve Bamford, executive director of PAID, Inc.