Salem Tax Burden On Its Residents And Small Businesses

Largely overlooked in the rush to permit Footprint/Toyota’s proposed dangerous gas power plant is the long-term payment in lieu of taxes (PILOT) agreement quietly negotiated by the City and the developer. It will levy a combined annual real estate and personal property tax of $4.75 Million on a property with a market value when complete of $800 Million. The $4.75 Million annual payment is equivalent to the taxes that would be levied on a property with a full fair market value of approximatey $150 Million with no PILOT agreement. This agreement is entirely inconsistent with the statute (GL Ch. 59, Sec 38H) which requires any PILOT agremeent to be based on a property’s full fair market value.

The agreement is based on the fiction that a power plant that will cost $800 Million to build will have a market value of $150 Million upon completion because future wholesale energy prices are unpredicatable. How “unpredicatable” can the price for Footprint/Toyota’s power be when it has a five year (2016-2021) capacity agreement with ISO New England at a price several times higher than the capacity price for existing plants in New England?

The PILOT agreement is a $15-20 Million annual operating subsidy for the owners of a fossil fuel plant. It will come directly from the pockets of the property owners (both residential and commercial) in Salem and from Salem’s schoolchildren, teachers, police and firefighters.

The PILOT agreement negotiated in the shaddows in Salem is a handout to Footprint/Toyota. Maybe you should visit your local Toyota dealer today and demand a 75% reduction in the price of a new Prius? Threaten to buy a Ford Focus hybrid if you don’t get exactly the price you want. See how far that gets you.