Erie School Board OK's LERTA extension. What's the next step?

The Erie School Board has signed off on extending a citywide tax break program considered vital to both residential and commercial development.

School directors on Wednesday night approved a five-year extension of the city’s Local Economic Revitalization Tax Assistance program through July 31, 2029.

LERTA provides 10-year property tax abatements for new construction or improvements at residential/commercial properties citywide.

Why was the extension necessary?

The city of Erie’s LERTA ordinance included what’s known as a sunset provision, which means that citywide LERTA tax breaks were set to expire on July 31 unless the three taxing bodies that signed off on them — the city of Erie, Erie County government and the Erie School District — agree to extend the program.

Erie City Council approved a citywide expansion of the city's LERTA program in June 2019, and the changes took effect in early July of that year. The school district and county government also signed off.

City Council OK’d a five-year LERTA extension on July 17. It provides 10-year, 100% abatements for city property taxes for residential and commercial properties.

As part of the citywide LERTA deal in 2019, the school district agreed to 10-year, 100% abatements for school taxes for residential properties and 10-year, 80% abatements for commercial properties.

The extension approved by the School Board on Wednesday keeps those same abatements in place.

LERTA impact

Mayor Joe Schember has touted LERTA a success, saying it has spurred nearly $320 million in commercial/residential development within city limits, including the waterfront.  That includes more than $50 million in residential property investments.

Before the changes, tax abatements under LERTA started at 100% but were on a sliding scale and available only to properties located in LERTA's target area, which was primarily the inner city.

Erie Schools Superintendent Brian Polito has said a school board subcommittee recommended the extension to the full board. Polito also supported the LERTA extension, saying that it could be worth up to $3.6 million in recurring yearly revenue to the school district.

Up next: Erie County government

Erie County Council must also approve the LERTA extension.

Erie County Councilman Rock Copeland, chairman of the panel's Finance Committee, said he expects final passage of a LERTA extension no later than Sept. 17.

Local officials said current LERTA projects won't be affected by extension approvals that came after the July 31 sunset date. They advise individuals seeking to file new LERTA applications to wait until after County Council gives final approval to the LERTA extension.

Contact Kevin Flowers at kflowers@timesnews.com . Follow him on Twitter at @ETNflowers .

This article originally appeared on Erie Times-News: Erie School Board OK's LERTA extension. What's the next step?