Mississippi lawmakers hope to widen property tax break

Article 4, Section 48 protects lawmakers from arrest for certain actions before, during and after the legislative session.


Mississippi lawmakers want to open one of the state’s richest tax incentive programs to smaller projects, in hopes of helping the state recruit more businesses.

Senate Bill 2479 , which passed the Senate on Thursday, awaits Gov. Phil Bryant’s signature or veto. It would allow local governments to cut local and school property taxes by two-thirds on economic development projects worth $60 million or more.

Right now, the project must be worth $100 million or more to qualify.

Although any one piece of real estate or equipment can only get a break for 10 years, the bill says industries would get to use the abatement on expansions for 30 years, up from the current 20 years.

"This is a very positive bill that will enhance our economic development efforts in Mississippi," said Chad Newell, president of the Hattiesburg-based Area Development Partnership. "We obviously work on more $60 million deals than we do on $100 million deals."

Called a fee-in-lieu of taxes agreement, the reduction can be worth tens of millions of dollars to the largest industries. Madison County, for example, reduced Nissan Motor Co.’s property taxes nearly $70 million from 2004 to 2015, according to figures provided by the Madison County tax assessor to The Associated Press.

Right now, for developments worth less than $100 million, cities and counties can abate taxes for 10 years, but can’t cut school property taxes. Senate Finance Committee Chairman Joey Fillingane, a Sumrall Republican, told senators Thursday that a company was considering building a $70 million-plus distribution center on the Jones-Forrest county line near the Hattiesburg-Laurel Regional Airport, but it was too small to meet the current threshold. He said county supervisors were willing to cut taxes, but "they simply just didn’t have the legislative authority."

The Mississippi Development Authority lists only eight projects that it has assisted since 2010 that fall in the $60 million to $100 million bracket, but Newell said there are others, such as three recent solar farms built near Hattiesburg, that also would have qualified.

"There are real projects out there looking to come to our areas that would use this," Fillingane said.

Some lawmakers and economic recruiters had favored lowering the threshold to $20 million, which would have opened the break up to many more developments, but lawmakers ultimately rejected that.

A few lawmakers questioned the move, though, asking if it would mean higher taxes for homeowners and small businesses.

"Are you concerned that the school districts are going to raise taxes on everybody to make up for this reduction?" asked Sen. Angela Hill, a Picayune Republican.

However, using reasoning common to economic incentive deals in Mississippi, Fillingane suggested it would be better to get some revenue from an expansion than to lose out entirely.

"A break on something is better than nothing," Fillingane said.

David Rumbarger, president of the Tupelo-based Community Development Foundation, said the fee-in-lieu arrangement also allows local governments to use the revenue they do get to finance infrastructure improvements.

"The idea is for more projects to be competitive on a state-to-state basis," Rumbarger said. "If you’re able to compete for the project and get the fee in lieu, it’s newfound tax revenue."

The measure also includes a special provision that would allow Winston Plywood & Veneer to count federal disaster relief money received after a tornado struck Louisville in 2014 to qualify for the tax exemption threshold.

(Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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Neil Shekhter on Los Angeles Isnt Building Enough Housing

LOS ANGELES, CA / ACCESSWIRE / February 27, 2018 / According to a recent report from the state Department of Housing and Community Development, a large majority of California’s urban areas, such as Los Angeles, aren’t giving approval for the construction of sufficient housing.

As a result of this situation, state housing authorities are now requiring that cities ease the process for developers to get approval for new construction projects that include affordable housing units.

During the last forty years, California’s municipalities had the responsibility of setting housing goals every five to eight years as a way of making sure that enough new homes are built to meet the demands of a growing population. Unfortunately, according to the state’s recent report, very few cities are meeting the goals they’ve set.

So far, it has been determined that only 13 cities have made a sufficient amount of progress toward meeting their housing construction targets for 2017. 526 other cities haven’t and will now be required to fast track the approval of some new housing development projects.

Under a new law which took effect at the beginning of 2018, cities must speed up the review of developments made up of at least ten percent affordable housing units if they’ve failed to meet their objectives for market rate housing. Municipalities that met their targets for market rate housing but haven’t met the requirements for new affordable housing units will nee to streamline the review of projects in which at least half the housing units are affordable to low-income residents.

While Los Angeles is expected to meet its overall new housing construction objective by issuing permits for nearly 82,000 new homes by 2021, the city hasn’t met its goals when it comes to the construction of enough affordable housing units. Out of 45,820 new units the city has issued permits for since 2014, less than ten percent are classified as affordable to low-income residents.

As the city is very much behind schedule with regards to new affordable housing, planners must now streamline the approval of projects which include 50 percent or more affordable housing units. Some other cities in California, including Burbank, Long Beach and Santa Monica, will need to fast track development projects with ten percent or more affordable units.

The lack of affordable housing in the city of Los Angeles has been an ongoing problem for several years. A recent report by the California Housing Partnership Corporation estimates that the city now requires the construction of over 500,000 new affordable housing units in order to meet the current level of demand.

Launching NMS Properties in 1988, Neil Shekhter assumed the role of CEO in January 1995. The real estate management company focuses on multi-family and mixed-use properties in the Greater Los Angeles area and in Santa Monica. At present, NMS properties manages more than 70 properties.

Over the course of 2017, NMS deployed 40 furnished units in Los Angeles, and Neil Shekhter plans to triple that number in 2018. The company currently manages some of the its properties while testing a pilot with MY SUITE.

Neil Shekhter – Founder and CEO of NMS Properties
Apartments For Rent In Los Angeles NMS Residential: http://www.nmsresidential.com
NMS Properties – Real Estate Management Firm: http://www.nmsproperties.com

Contact Information: info@NeilShekhter.com

SOURCE: NMS Properties, Inc.

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