On February 10th, 2015, the Talbot county council introduced a resolution that would allow municipal Easton to annex roughly 22 acres of land owned by APS into the town’s limits. The land, situated in an industrial park, would allow Aphena Pharma Solutions the water supply needed in order to expand their enterprise. The pharmaceutical and manufacturing company made the request.
Currently, Maryland state law restricts the authority of a municipality annexing land to allow development of the annexed land for a period of 5 years for land uses substantially different from the authorized uses, or at substantially higher densities, exceeding 50%, than could be granted for proposed development. The county council would have to give their expressed approval to a resolution (to be passed with a public hearing) in order for the process to be approved.
The purpose of the annexation is to allow APS not only to expand their operations, but to remain compliant with federal law that requires any company doing business in a chemically involved industry to begin their processes with potable water.
Council President Corey Pack noted, “The main thrust behind the proposal was maintaining jobs in the community. The company explained to us, that if they couldn’t connect to the town’s sewer system, there was a possible that they may have to leave the area. Not only did we not want the company to leave the area, we wanted to increase the employment sector.”
However, in order for APS to expand their base of operations, they requested some state assistance. The state granted a $134,000 on the condition that APS retains a minimum of 100 employees for five years. Along with the expansion, Talbot County and the town of Easton have agreed to abolish the town’s personal property tax for manufacturers. The town of Easton also agreed to a 10% match of the state’s grant, or $13,400. The purpose of the grant was to offset the expenditures incurred by the company during the water supply hookup phase of the transition. Talbot County also approved a grant of $150,000 to the town of Easton, in order to offset the loss in revenue. All in all, the cost for the expansion project will cost taxpayers roughly $300,000. Aphena Pharma Solutions would be investing $3 million dollars for expansion.
Due to EPA regulations that force pharmaceutical companies to use a treated water supply during their production processes, state and county residents are in a situation where they feel forced to assist in “the cost of doing business” – paying for economic growth and development. Basically, companies that are willing to expand because there is a market for their products can only do so at the cost of the people within proximity of said companies’ base of operations.
Normally, I would rail against subsidizing any industry. But the people elected a Governor who campaigned on bringing businesses back to Maryland. In today’s economic climate, states have no choice but to offer incentives in order to keep businesses from leaving.
If the “cost of doing business” is granting taxpayer funding to save jobs, then the benefit must outweigh the cost. If the cost-benefit has been measured and it is a clear-cut case, then we have to make sure that our residents continue to have economic opportunity. Across the state, we see posted signs of the name of our new Governor, Larry Hogan. Underneath that sign it states, “We’re open for Business.”
But, we’re only open for business if our state government grants tax incentives. Even then, there would be nothing stopping companies from leaving once those tax breaks expired. Once a company expands or brings in new business to the surrounding areas, the property values for homeowners increase. This means that the local economy has been upraised. However, increasing property value brings with it, increased property taxes.
In this case, I submit to residents that increasing land value is a sign of a growing economy, and as of right now, is of vital importance to the future of Talbot County.
When presented at the front end, these agreements sound great, but many fail to live up to their promises. If the taxpayers are going to bear some of the cost of progress, then it’s up to residents to ensure that this deal lives up to what it says it will do.
Kirk French Jr.
Doug Davies says
What is the cost to the Town in infrastructure maintenance long term versus profit? does the second lifecycle of all the infrastructure improvments pay for themselves?
https://www.strongtowns.org/journal/2010/3/17/the-cost-of-development-walker-industrial-park.html