Westinghouse tax abatements not without significant concerns
The benefits stemming from Westinghouse Electric Co.'s selection of the Cranberry Woods office park for its new $100 million headquarters and research center will be huge. That is beyond debate.
Westinghouse says the estimated economic impact to the Cranberry region from just the 1,000 additional people it will be hiring will be about $2.3 billion in 10 years.
But the move here from Monroeville won't come without a significant price to Butler County taxpayers, especially those in the county's southwest sector, as well as to state taxpayers in general.
Fifteen-year tax abatements already given — or which will be given this week — to Westinghouse will place a bigger tax burden on the shoulders of other taxpayers.
Meanwhile, smaller business entities not eligible for such abatements won't be off-base in lamenting the special tax treatment being given big business like Westinghouse, partly at their expense.
It is troubling that intense competition between states or regions of the country, as well as the threat of companies moving outside the United States borders, has created a scenario in which states and local areas must "give away the store" in terms of taxes, in order to attract major businesses or industries.
And, with all of the assets and advantages Cranberry Woods holds for any business enterprise looking to move there, it can legitimately be asked whether too many tax concessions were made to Westinghouse in the quest to gets its signature on the dotted line.
However, that issue now is moot, with the state General Assembly and Gov. Ed Rendell having authorized state tax abatements for Westinghouse last fall and the Cranberry Township supervisors having approved local tax abatements Thursday.
The Seneca Valley School Board and Butler County commissioners will consider their abatement measures this week, and any opposition or concerns won't be strong enough to derail the tax package.
But the long-term Westinghouse tax abatements are likely to be lamented over time as the county, township and school district — even the state — face increased financial pressures.
For example, over time, it is likely that Westinghouse's arrival will contribute to the need for expanded Seneca Valley school facilities that will have to be paid for by local taxpayers' dollars, without a commensurate amount of Westinghouse tax dollars in the pot.
Still, Westinghouse has obligations in regard to its state abatement. It must create or maintain at least 500 jobs or make a capital investment of $45 million or more in three years.
All considered, Westinghouse's move to Butler County is a great accomplishment for all those involved in business and industrial development here. The company will benefit many local entities and enhance the desirability of this area as a place in which to live and raise a family.
But it still can be pondered how much more the local area could benefit if Westinghouse did not have such a generous abatement for the following local taxes: business gross receipts, business occupancy, business privilege and mercantile, sales and use, property and earned-income.
And it also can be pondered what the financial loss to the state will be over its 15 years of Westinghouse abatements, which include the following taxes: corporate net income, corporate stock and franchise, insurance premium, bank and trust company shares, mutual thrift and institutional, sales and use, and personal income.
The bottom line is that, amid the euphoria over Westinghouse's pending arrival, there is a downside and sacrifices that also must be acknowledged.
The total price tag of what the taxing bodies will sacrifice over the next 15 years won't be known until 2023 or thereafter.
