Commissioners Approve 10-year Citywide LERTA Tax Abatement For Scranton

February 20, 2019 GMT

SCRANTON — A new tax abatement program means residents can build or expand city homes and developers can erect new buildings in the city without paying taxes on those improvements for 10 years.

Following the lead of both the Scranton School District and City Council, Lackawanna County commissioners today approved a 10-year tax abatement on commercial and residential improvements in Scranton. The county is the third and final taxing body to approve the decade-long Local Economic Revitalization Tax Assistance program, or LERTA.

The citywide LERTA exempts all participating Scranton property owners from paying taxes on new construction and large-scale improvements that trigger a reassessment of a property, such as an addition to or expansion of a home or business. Property owners still must pay taxes on land and existing structures.


Proponents, including the Greater Scranton Chamber of Commerce, say such an abatement incentive eventually results in more generated tax revenue because building improvements often wouldn’t be made otherwise. Chamber officials — who have been working with the city and others on the LERTA issue for months — also touted it as a means of sparking new economic development in the city, especially when coupled with new federal opportunity-zone capital gains tax incentives established in the Tax Cuts and Jobs Act of 2017.

“We look at this as an investment to the future,” chamber economic development specialist Bruce Reddock told commissioners. “You provide this LERTA incentive now, (and) 10 years from now, when all those ... improvements come back onto the tax rolls, you should see a substantial amount of tax dollars coming into Lackawanna County.”

Under state law, local taxing authorities must establish boundaries for deteriorated areas eligible for LERTA benefits. In this case, city officials designated the entire city but that doesn’t mean every building in Scranton is deteriorated. Commissioners ultimately voted 2-0 approving the LERTA, with Commissioner Laureen Cummings abstaining.

Cummings voiced concerns that designating the entire city as deteriorated might negatively affect residents in unforeseen ways. Reddock and others noted the designation strictly establishes boundaries for the LERTA program, applies only to the LERTA and doesn’t place a label on anyone’s home or business.

In 2016, Scranton created a three-year LERTA program, but officials said it has not produced appreciable results. The chamber’s commitment to marketing the new LERTA program, as well as the incentive’s significantly longer term, should produce stronger results, City Councilman Wayne Evans said.


“We are really confident that this is going to create some major opportunities for growth,” he said.

Council President Pat Rogan said the city’s solicitor is reviewing the LERTA ordinance council passed last year to see if any changes need to be made. Either way, council is committed to offering the incentive, Rogan said.

In other business Wednesday, commissioners approved a $57,295.78 payment to Scranton law firm Myers, Brier & Kelly LLP, one of the firms representing the county related to the ongoing statewide grand jury probe into sex abuse at the county jail. That payment brings the running total of legal bills incurred by the county stemming from the probe to about $749,186.

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