Following a public hearing on the proposal, Lehighton Borough Council has unanimously decided to advertise the adoption of an ordinance creating a Local Economic Revitalization Tax Assistance (LERTA) zone to help Lehighton Ford in carrying out a $5 million upgrade to its facility on Route 443, and, ultimately, to help other businesses in the borough which meet the program’s criteria. One of the major requirements is that improvements must be for at least $75,000.

Representatives of Lehighton Ford and any other business which apply also will go before the other two taxing agencies - Lehighton Area School Board and Carbon County. Two of three need to approve the initiative.

Lehighton Ford hopes to have its renovations done by next March and when it does it expects the dealership to be more in tune with the trend toward electric vehicles.

Council plans to adopt the proposal at its September meeting.

While state and local officials see the LERTA program as an important way to help improve businesses with financial assistance, others brand it as another example of “corporate welfare,’’ and point out that individual property-owners are not eligible.

State officials suggest that the effectiveness and desirability of the LERTA program depends on the specific goals and circumstances of each community which undertakes the program. They require careful consideration of both short-term benefits and potential long-term consequences.

As such there are pros and cons to any tax-abatement program, including LERTA. These programs can enhance existing businesses, attract new businesses and investors, stimulate the economy and create jobs. They also can encourage redevelopment of blighted or underutilized areas and improve the overall appearance and functionality of the community.

Increased property values are often a by-product of these programs. This could mean higher tax revenue once the abatement period ends. After the certificate of occupancy of the improved project has been granted, the percentage of the improved assessed value is diminished by 100% the first year, 90% the second, 80% the third, continuing in 10% decreases through the 10th year when the business or other improved entity will begin paying the full additional assessed value. To be clear, this involves just the assessed value of the improvements, not the entire taxes paid by a business or company.

Along with these benefits, there are some downsides, too. These programs can lead to temporary losses in tax revenue, which could strain community services. There is also a concern that the tax-abatement program can benefit wealthier businesses and developers more than smaller enterprises.

One of the biggest concerns is that some of the projects might not deliver the promised benefits, resulting in communities being left with underutilized developments after the abatement period ends. Another concern is that the long-term fiscal impact might not justify the short-term benefits, which could impact public services

State law requires the municipal governing body to hold at least one public hearing for the purpose of determining boundaries. At the public hearing the local taxing authorities, planning commission or redevelopment authority and other public and private agencies and individuals knowledgeable and interested in the improvement of deteriorated areas, present their recommendations concerning the location of boundaries of the zone.

One major recommendation at the recent public hearing in Lehighton was made by the Lehighton Area School District Business Manager Ed Rarick, who urged reduction of the tax-abatement period from 10 to five years and to confine the designated area to just Route 443, not the entire borough.

Members of the borough council, however, felt that it was fairest to include all businesses in the borough interested in participating in the program, although, admittedly, requiring at least $75,000 in renovations will be a steep climb for some.

By BRUCE FRASSINELLI|tneditor@tnonline.com

The foregoing opinions do not necessarily reflect the views of the Editorial Board or Times News LLC.