…to equal the local tax base and job creation benefit of 1 manufacturing facility?
Here is the math.
Mack Trucks – Lots of employees per acre of land at excellent wages. Manageable impact (well worth it for the excellent paying jobs) and good local tax generation.
MANUFACTURING
Mack Trucks consists of 922,950 SF of floor area on 147 acres. The facility generates exactly 9,000 dollars a year in municipal property taxes. The employee counts fluctuate yearly, but they average around 1,850 employees annually. This year Mack is on track to contribute around *84,000 dollars in local services tax receipts. On average 100 of those 1,850 employees live in the township so we collect another 7,000 dollars in **earned income tax.
Property Tax – 9,000
LST – 84,000
EIT – 7,000
$100,000 yearly Lower Mac tax benefit
1850 employees over 147 acres – 13 jobs per acre.
All together Mack Trucks injects 100,000 dollars annually into Lower Macungie Twp. directly through tax receipts.
The question here is how many warehouses on how many acres of consumed land (in our case prime farmland) does it take to match that amount of tax base generation and jobs?
Low revenue per acre and few employees paired with costly liabilities. Not a winner for the local government.
WAREHOUSES
The answer is more than 5 buildings totaling 2.5M + SF of floorspace eating up nearly 200 acres of former farmland. Total property tax receipts on 5 properties analyzed are $45,000. On average all 5 buildings together employ about 600 people. Problem is many are part time or otherwise do not qualify for the 12,000 a year threshold in earnings for the township to collect the LST. Employee turnover is also very high. So the total LST generation for these 5 buildings is roughly $26,000. Of those 600 employees only a small percentage, 34 live in the township. We collect about $3,000 dollars in EIT from them total.
Property Tax – 45,000
LST – 26,000
EIT – 3,000
$74,000 yearly township tax benefit
600 employees over 200 acres = 3 jobs per acre of land.
All together 5 warehouses analyzed which eat up nearly 200 acres of land and generate a grand total of $74,000 dollars. 35% less than Mack on 35% more land.
Conclusion
5 warehouse facilities eat up about 35% more land (in Lower Mac’s case irreplaceable prime farmland) but in total generate about 35% less revenue.
Jobs? That’s 13 jobs per acre for Mack Trucks vs. 3 jobs per acre for the warehouses. Mack generates over 300% more jobs per acre than the warehouses.
This is of course only one half of the equation. The municipal liabilities which aren’t as easily quantified but verifiable are exponentially more impactful with the warehouses.
Now, Mack Trucks is a powerhouse. That’s readily acknowledged. But what about other manufacturing facilities in the township? The numbers remain staggering. Similar numbers for special effects producer Smooth on. 350% more jobs per acre than warehouses and 170% more tax revenue generation per acre. And smooth has so little impact on it’s neighbors that it’s located within a neighborhood. (I live next to the facility and it’s an excellent neighbor) It’s outstanding tax generation numbers are also a credit to the companies very high wages. We get the added benefit of a company mentality and philosophy that encourages employees to live near the facility. Oftentimes within walking distance.
How about Victaulic? Situated on just 10 acres it employs over 150 employees locally. Again, over 350% more jobs per acre than the warehouses. And this little powerhouse generates over 125% more revenue per acre.
*LST Persons working in the township are assessed $52 for local services. Those earning less than 12,000 per year are exempt.
** EIT Collected from employees who reside in the township. 1/2 of 1% of earnings.
*** Property Tax – Lower Mac has a .50 millage property tax.
