The Faces of 90.5 WESA
Thu October 4, 2012
Shell Agrees to Pay for Lost Tax Revenue
The Royal Dutch Shell Oil Company is proposing to compensate Beaver County for tax revenue lost when it builds a billion-dollar petrochemical facility, known as an ethane cracker, on tax-free land.
County Commissioner Tony Amadio said Shell’s operations would be located in a Keystone Opportunity Expansion Zone (KOEZ), land that is exempt from taxes for 22 years.
According to the Pennsylvania Department of Revenue, KOEZs are tax-free areas that allow businesses to forgo taxes and invest that money in operations. Businesses in KOEZs are usually given priority for state and local community-building assistance programs.
Amadio said Shell was attracted to the site because of its KOEZ designation.
“We don’t know who would come and who would look at it,” said Amadio. “If Shell chooses this site, the ancillary businesses that will come along with Shell will be phenomenal for the county and the region.”
Shell has agreed to pay 110 percent of the amount generated in 2011 property tax revenue at the site. The county will receive $44,000 yearly while the Central Valley School District would collect $300,000 per year.
Amadio said the payments would continue through the 22 years the space is tax exempt, and it would greatly impact their budget process.
“We’re not only preparing next year’s budget, we’re looking at a three year plan,” said Amadio. “And that hole will be covered in our budget now.”
He said some beneficiaries still need to sign off on the deal including the Beaver County Board of Commissioners and the Central Valley School Board.
Amadio said he expects all of the votes needed for the deal to be finished by the end of November.