State to offer tax-free zones

By MATT WUNSCHE
Collegian Staff Writer

To help spur growth in some economically depressed areas, the state will discontinue collecting certain taxes from individuals and businesses.

In February, Gov. Tom Ridge announced plans to designate certain areas as "Keystone Opportunity Zones," where taxes will be eliminated in an effort to stimulate jobs and spur community renewal.

Steve Morgan, spokesperson for the Department of Community and Economic Development, said businesses in the designated zones will be exempt from local property and business taxes as well as state business taxes.

Residents will not need to pay state or local property or personal income taxes.

The tax breaks are retroactive to Jan. 1, 1999, Morgan added.

Because there are only 12 opportunity zone regions that each include many counties and municipalities, the program forced members of different communities to work together to designate the areas to benefit from the program, Morgan said.

"This is about restoring neighborhoods and communities as well as helping businesses," said Ridge spokesperson Steve Aaron.

In Centre County, the designated opportunity zones include the Mid-State Regional Airport, which is part of the total of 567 acres of land affected, Morgan said.

"Tax-free Keystone Opportunity Zones provide a powerful incentive to bring new jobs, new families and new hope to our communities," Ridge said in a press release.

"What better incentive is there to create jobs and build stronger communities than to eliminate taxes?," he added.

Ridge said previous government programs have failed to help troubled neighborhoods.

"Clearly, whatever has been tried in these neighborhoods in the past has failed," Aaron said.

The program is radically different from anything tried in the state in the past, Aaron added.

"We've never completely eliminated taxes before this program," he said.

Aaron said the only state with a similar program is Michigan, but the program there is not as far-reaching as Pennsylvania's.

In contrast, Michigan does not apply the tax exemption to residents as well as businesses.