PILOT’s – the Reason for Your Coming Tax Increase

Crony CapitalismIs it fair that common everyday taxpayers in Chattanooga & Hamilton County must pay 100% of their property taxes, including individuals who are finding it difficult to make it on fixed incomes as well as small struggling businesses, while wealthy, well connected businessmen get hundreds of thousands if not millions of dollars in tax breaks that go straight into their back pockets!

The Chattanooga City Council and Hamilton County Commission just gave away a 14 year $1 Million tax break to a wealthy apartment developer who promised to offer 20% of his units as “affordable ones” which is defined as a “sprawling” 400 square feet for $750 month. If you deem that as affordable then I’d be glad to rent you 1200 square feet for $2,250. Any takers?  Of course not because we all know, at least the real world that has to balance a budget knows that those numbers are NOT affordable housing numbers.  And for this “deal” the following City Councilmen voted to extend nearly $1 million in tax breaks to a wealthy, for profit housing developer:  Chris Anderson, Carol Berz, Moses Freeman, Russell Gilbert, and Jerry Mitchell.

On the County Commission side these men voted YES for the same county tax break: Greg Beck, Jim Fields, Randy Fairbanks, Marty Haynes and Joe Graham.  In Commissioner Graham’s case he had been asked to recuse himself because he not only votes YES for these PILOT (Payment in Lieu of Taxes) projects but he also sits on the Board of River City Company, the entity that is the primary proponent, lobbyist and representative for the PILOT applicants.  To date Commissioner Graham has refused to acknowledge this glaring conflict of interest and remains a YES vote the applicants can count on — which Commissioner Graham acknowledged to me via a personal email.

Unfortunately, the Walk2Campus $1 Million giveaway wasn’t the last straw for these elected officials.  No, they are all too happy and eager to give away more of your taxpayer money as the City Council did again this week when they gifted former Chattanooga Mayor Jon Kinsey and his wealthy, well connect partners with Choo Choo Partners another huge tax break worth several hundred thousand dollars. Oh, and like Walk2Campus, the Choo Choo deal promises more affordable housing, this time 350 square feet for $800 per month (including utilities)!  And like I mentioned previously, if this is the new definition of affordable housing then I’d be glad to offer 1050 square feet for $2400 per month… and I’ll throw in the utilities too!  (A little tongue in cheek sarcasm.)

I’ve called what is happening with these PILOT’s “Crony Capitalism” and in my view this is one of the most shameful uses or perhaps abuses of government.  But let me reveal why I call it this.

Recall that I previously mentioned that River City Company is the “non-profit” company that promotes, speaks out and lobbies on behalf of the PILOT applicant to the City Council and County Commission for significant tax breaks.  But here’s where the incestuous nature of these PILOT programs gets quite concerning and telling.  Note that Mayor Kinsey was a Board member of River City Company.  Note that Mr. Kinsey’s partner, Ken Hays was a former River City President.  And note that Kinsey’s third partner, Ben Probasco’s former boss is a current River City Board Member.  But it doesn’t stop there. Mayor Andy Berke, a strong proponent for PILOT’s who has no doubt twisted a few arms on the City Council, is a Board member at River City Company.  City Councilman and Chairman Chip Henderson is a River City Company Board Member.  One would have to be blind, deaf, dumb, or simply unwilling to face the facts that knowing the right people certainly helps get you hundreds of thousands of dollars in tax breaks.

If you’re a business owner or simply a property owner in Chattanooga, I’m sorry to inform you that there are no sweet deals for you.  Nope, you’re on your own.  Meanwhile the elite, the who’s who, the well connected are able to pad their pockets and your elected officials are more than willing to oblige them.  Oh, and by the way, here are the Chattanooga City Council members who voted YES to give more of your tax dollars away to their friend Jon Kinsey and his buddies:  Carol Berz, Moses Freeman, Yusuf Hakeem, Jerry Mitchell, Russell Gilbert, Chip Henderson, Larry Grohn, Ken Smith (Chris Anderson was not in attendance but it was said that he would have been a YES vote as well).  If you wondered, yes, that was a unanimous YES to give your tax dollars away to your former Mayor and his wealthy partners… so they can offer “affordable housing!”

Now, the final chapter in the Choo Choo Partners PILOT tax break is still unwritten as it must go before the Hamilton County Commission to see if they will follow in the steps of the City Council and grant a similar tax break (as they did for the Walk2Campus tax giveaway).  But if one can count fingers, the votes would seem to be there to insure another Crony Capitalism tax break for friends of the Commission who have all the right people in all the right places.   We know for sure that River City Company Board Member Joe Graham has already promised a YES vote for the project when he removes his RCC Board hat and puts on his County Commissioner hat.  Remember, Joe emailed me on Feb 17 and said “I am already on record as a supporter of this (Walk2Campus) and one more pilot (at the Choo Choo). I am going to follow through with my yes vote…”  So he’s doing his duty as a good Board member of River City Company in supporting the projects that RCC then brings to him to vote for.  But of course, as Joe insists, there’s NO conflict of interest there.  Trust him.

And if just four more County Commissioners vote YES with Graham then it’s another win for Crony Capitalism.  I should also note that County Mayor Jim Coppinger also sits on the River City Board and while he does not actually cast a vote, he does hold significant power of persuasion over some Commissioners.

If you’d like to have a say so in how this final chapter is written then you still have an option left to you.  You can call your County Commissioners and tell them that you think it’s wrong to dole out taxpayer dollars to the political elite with all the right connections and that they must stop this shameful practice.  Furthermore, you can tell them that you are against any upcoming property tax increase and that you expect them to stop giving tax breaks to folks who don’t need them.  Remind them that every time they refuse to collect taxes from the big guy, the connected guy, the wealthy guy, they are increasing the burden on the little guy, the unknown guy, the poor guy.  Tell them that this is not fair and that you expect them to start assessing and collecting taxes fairly and justly without preferential treatment.

So call your County Commissioners TODAY and tell them to vote NO on the Choo Choo PILOT that will be discussed this Thursday, 3/12 and voted on the following Wednesday, 3/18.  They can be reached at 423-209-7200 or you can find their email at http://www.hamiltontn.gov/Commission/

It’s time to put you back in charge of your government and that starts with a simple phone call, a polite request and then a long term memory of those names that ignored you and still gave away the farm today to the wealthy elite to increase your taxes tomorrow.

And if you’re someone who looks to God’s Word for examples on matters such as this, you might remind the Commissioners to read James 2:2-4:

  • “… suppose someone comes into your meeting dressed in fancy clothes and expensive jewelry, and another comes in who is poor and dressed in dirty clothes. If you give special attention and a good seat to the rich person, but you say to the poor one, ‘You can stand over there, or else sit on the floor’— well, doesn’t this discrimination show that your judgments are guided by evil motives.”

One thought on “PILOT’s – the Reason for Your Coming Tax Increase

  1. The merit to Joe Graham’s point in support of the Walk2Campus and Choo Choo PILOTs is insufficient to justify moving forward with the practice of picking winners and losers among property owners in Hamilton County. The time to retreat from an unjust decision, that being the original decision to authorize PILOTs, is now rather than later.

    To move forward for the sake of not changing directions on any of the Walk2Campus or Choo Choo principals would be to treat the interests of those parties as though they are more important than the interests of the universe of Hamilton property owners. The overriding issue is one of fairness to the public. We ought not move forward with two unfair tax abatements at the expense of the tax paying public.

    Although I am new to this issue, what little background I have gleaned to this point is that the Walk2Campus PILOT was justified on the basis that already high Hamilton County/City of Chattanooga property taxes were a deterrent to desirable construction of downtown residential housing units. So while the legislative bodies involved and the RCC recognized that we have a problem, the solution of allowing property tax exemptions for the few at the expense of the many seems patently unfair. We can come up with better solutions that are fair to our citizens and taxpayers.

    Lee Franks

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