Allegheny County Controller Corey O’Connor announced today that his office will begin an audit of subsidy programs benefiting private development projects administered by the County’s Department of Economic Development (ACED). These include projects supported by the Tax Increment Financing (TIF) and Local Economic Development Revitalization Act (LERTA) programs. TIF diverts tax proceeds from the property being developed to pay for on-site infrastructure improvements, while LERTA forgives taxation on the property for a defined period.
A previous audit by the Controller’s office examining a period through 2017 identified 28 TIF and 59 LERTA projects in the County that diverted more than $5 million in property tax revenue from the County that year. The audit found that various internal controls and documentation requirements were not being met by ACED, and that subsidies in some cases may not have been necessary to induce development.
The audit will also determine whether workers on these projects are being paid family-sustaining living wages and prevailing wages as required by law.
“We must ensure that these subsidies have real benefits for residents and workers. It’s imperative that taxpayer-supported projects lift up working families and pay living wages, including the prevailing wage when required by law. Paying quality wages on public projects boosts wages across all sectors, which is so important for working families in today’s economy,” O’Connor said.
“The County’s Service Worker Prevailing Wage ordinance is meant to ensure that publicly funded developments create good quality jobs, but it can only be effectively enforced if workers know when they are covered. 32BJ SEIU commends Controller O’Connor for commencing an audit of public development subsidies as one of his first initiatives. Understanding where those dollars have gone should help the region assess their impact and hold developers and employers accountable,” said Sam Williamson, Western Pennsylvania District Leader, 32BJ SEIU.
As a member of Pittsburgh City Council, Controller O’Connor authored a law that now requires tax abatements entered into by the City to be audited annually.
“The actions of our local governments to support development projects should improve the prospects of working families and help the neighborhoods that need it, not hinder families and small businesses from remaining in communities that are experiencing growth and change. Pittsburgh and Allegheny County in recent years have seen some areas booming while others remain stagnant. This has resulted in areas where housing has become unaffordable for working families, and other areas where available housing is dilapidated or unsafe, jobs and services are scarce, and transportation access is lacking,” O’Connor said. “While subsidy programs can be valuable, common sense should dictate that they be used where development is needed to create opportunity and otherwise would be unlikely to occur. I am pleased to bring these efforts at transparency and fairness that I spearheaded at the City to my new role with Allegheny County.”
MEDIA CONTACT: Lou Takacs