Murtha’s ‘Charity’ Is Expensive
Earlier this month, I wrote about CTC’s sweetheart deal in which they’re receiving no-bid contracts, aka earmarks, through John Murtha’s ‘work’ on the House Defense Aprpopriations Subcommittee. I’ve said that eventually Johnstown will need to develop a real economy. Here’s what I posted in that earlier post:
Concurrent Technologies began two decades ago doing metalworking research in Pennsylvania’s struggling rust belt. In the years since, the Johnstown, Pa., company has become a federal contracting chameleon.
It is an intelligence adviser, an environmental consultant and a software engineering specialist. It has trained mine-detecting dogs and managed religion-based initiatives. It oversees construction projects, organizes conferences and studies ways to use hydrogen for fuel in Pennsylvania and South Carolina. Missile-defense research is part of its portfolio. So is the development of special armor for combat vehicles in Iraq and “solid waste technology” in Florida.
And it is a nonprofit charity.
Behind the rise of Concurrent is Rep. John P. Murtha (D-Pa.), chairman of the House Appropriations Committee’s defense subcommittee, who helped arrange funding to launch the organization in 1988. Murtha has since arranged millions of dollars more in directed Congressional appropriations called earmarks. Now Concurrent has early $250 million in annual revenue and 1,500 employees.
Concurrent is a prime example of how to marry entrepreneurial savvy, influence on Capitol Hill and arcane procurement rules to create budget magnets in congressional districts. Unlike many other big contractors, Concurrent pays no income tax on most of its revenue. Unlike nonprofit, federally funded research-and-development corporations, it is not chartered by the federal government.
Despite the steady stream of income into CTC’s Johnstown facility, it seems that Johnstown is now in financial hot water:
In cash-strapped Johnstown, an extra $1 million per year could go a long way.
A new bill proposed in the state House could give Johnstown, and other cities struggling with high levels of tax-exempt property, financial relief annually.
Initial projections show Johnstown receiving more than $994,000 in state aid under the bill’s current formula.
The plan would use state revenues from the 18 percent “Johnstown Flood Tax” on liquor sales. That levy initially was conceived to rebuild Johnstown after the 1936 Flood.
“Now, we’re trying to rebuild a bunch of communities in Pennsylvania,” said state Rep. Bob Freeman, a Northampton County-based Democrat who introduced the bill this month.
Johnstown’s tax-exempt dilemma is one example of a big problem plaguing urban centers, Freeman said. Officials in cities across the state have watched their tax base erode even while operating expenses continue to rise.
As business and industry migrated to the suburbs, cities were left with nonprofit entities that, while used by residents regionally, are not taxable. Hospitals are one example.
“They’re unfairly disadvantaged,” Freeman said of the municipalities his bill would assist. “It just doesn’t give government the base to operate from in order to provide essential services.”
Nearly half of Johnstown’s total assessed property value is tax-exempt. The city receives payments in lieu of taxes from some nonprofits, but that total contribution represents only a fraction of the tax revenue the city would receive from a taxable entity.
I wonder how many of those tax exempt properties are owned by Murtha’s cronies.The next logical question is whether Pennsylvania’s taxpayers can afford much more or Murtha’s charity. Here’s how Pennsylvania plans on dealing with this crisis:
The bill would create “tax-exempt property municipal assistance fund” using revenue from the liquor levy, which in the 2006-07 fiscal year generated $239.4
million. That “flood tax” money currently goes straight into the state’s coffers.To be eligible for aid, a locale must prove that 17 percent or more of its total assessed property value is tax-exempt.
Some red flags are going off. Why would 17 percent of a city’s property be tax exempt?
Here in Minnesota, Gov. Pawlenty responded to Sen. Majority Leader Larry Pogemiller’s whining about his not raising taxes by saying that “you can’t government your way to prosperity.” It’s time that Pennsylvanians leaned that, too. If Johnstown wants a real solution to its dilemma, they’ll lobby Harrisburg to cut taxes so they can develop a real economy built on businesses that pay property taxes.
The legislation proposed isn’t a solution. It’s an expansion of oppressive governemt. Isn’t it time Harrisburg started thinking like real humans instead of thinking that they can “government [their] way to prosperity”?
Technorati Tags: Johnstown, John Murtha, Big Government, Concurrent Technologies, Charity, Tax Cuts, Tim Pawlenty
Cross-posted at LetFreedomRingBlog