As PILOT ends, C-D taxpayers feel impact — in a good way

File photo Students leaving Cairo-Durham High School in a February 2018 file photo.

DURHAM — With the expiration of a tax incentive agreement signed 10 years ago, taxpayers in the Cairo-Durham school district are feeling the impact — but in a good way.

The proposed $32,212,222 budget for the 2021-22 school year is slated to include a 4.45% tax levy increase, which is at the district’s tax cap under New York state law.

But while the tax levy will rise, individual tax rates are expected to go down, according to the proposed district budget.

The tax rate decline is due to the expiration of a Payment in Lieu of Taxes, or PILOT, agreement with GlaxoSmithKline — a pharmaceutical company that operates a plant in East Durham — that expired last year.

“The way the PILOT works is the company comes to an agreement with the Greene County IDA (Industrial Development Agency) to have a separate payment instead of taxes,” District Superintendent Michael Wetherbee said Friday. “We have been getting that separate payment instead of taxes. With the expiration of the PILOT, we will no longer get that payment from GlaxoSmithKline and they will go on the tax rolls just as any other taxpayer would be.”

The result is lower school taxes for property owners in the Cairo-Durham school district for the coming year.

As with all proposed school budgets, the exact tax rate will not be known until summer when assessments and the equalization rate are set.

“Although our overall tax levy is going up this year, what the typical taxpayer will pay is less in the coming year than this year because GSK is back on the tax rolls. They will absorb all of the increase in the tax levy and then some, which is why we anticipate everyone else’s taxes would go down,” Wetherbee said.

With the expiration of the 10-year PILOT agreement last year, the GlaxoSmithKline plant is back on the tax rolls as of March 1, Greene County IDA Executive Director Rene VanSchaack said.

The PILOT was created as an incentive for the company to stay at the East Durham plant after GlaxoSmithKline purchased Stiefel Laboratories, which had been housed at the facility for many years.

“Stiefel had sold out to GlaxoSmithKline and GlaxoSmithKline just wanted the patents and the product lines,” VanSchaack said. “They were going to move all their skin care line, which is what used to be made there, to their other facilities. We were able to convince them to relocate their oral care products from New Jersey to here.” If the company had left the East Durham plant, it would have cost the community 165 jobs at the time, VanSchaack said. The PILOT was designed as an incentive to stay in the community.

“In my opinion, that was one of the examples of how incentives should be used,” VanSchaack said. “It is a very highly specialized factory in the middle of nowhere and it would have been extremely hard to get anyone else to come in there. If they had closed the facility, we might never have gotten anyone to come in there and use it.”

Under the PILOT agreement, the company pledged to retain and create 165 jobs and now has 294 employees at the plant, VanSchaack said.

“So they have exceeded their requirement for employees by 175% of where they needed to be at,” he said. “This is the poster child for how tax incentives should work.”

Voters will head to the polls May 18 to vote on the proposed school budget, board of education and a proposition to purchase six school buses for the Cairo-Durham school district.

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