GlobalFoundries money boosts schools, towns
MALTA & STILLWATER The towns of Malta and Stillwater and their two school districts this week are receiving $13.2 million in payments in lieu of taxes from GlobalFoundries.
The money, while anticipated, will be a major shot in the arm for the Ballston Spa Central School District and the other entities. The computer chip manufacturer, where 2,100 people work, is the largest single taxpayer for both towns.
The payments on behalf of the computer chip giant’s Fab 8 complex accounted for 94 percent of the $14 million in PILOT funds distributed countywide this week by the Saratoga County Industrial Development Agency.
“They dwarf everything else the IDA does,” acknowledged IDA CEO Larry Benton.
The IDA is responsible for distributing the GlobalFoundries PILOT funds under a complex plan established in 2004 to ensure that both Malta and Stillwater receive some tax benefit from development at the Luther Forest Technology Campus.
Fab 8 is located in Malta but is on the border between the two towns, as is the entire technology campus.
Malta and the Ballston Spa school district receive payments based on 75 percent of GlobalFoundries’ assessed value, while Stillwater entities get 25 percent.
Of the $13.2 million, the largest piece — nearly $8.7 million — went to the Ballston Spa Central School District.
Benton said GlobalFoundries over the past three years has paid the district $28 million; this year’s payment accounts for 23 percent of the Ballston Spa district’s tax levy.
School Superintendent Joseph Dragone said the money has lowered taxes for all school district residents.
“The simple answer is that increased revenue from economic development has resulted in decreased tax rates in all municipalities,” he said via email.
The Ballston Spa Central School District includes parts of Malta, Milton, Ballston and Charlton, and residents of all of them saw lower tax rates because of the payment, Dragone said.
The Stillwater Central School District is receiving $2.4 million under the arrangement. Saratoga County is receiving $1.5 million in PILOT money that will go into the county’s general fund.
The town of Stillwater is receiving $521,000 — equal to 10 percent of all of its spending — while the town of Malta, which has a much lower tax rate, is receiving $71,000.
“It’s new revenue we can do things with anywhere in our town,” said Stillwater Town Supervisor Edward Kinowski. “It’s economic development money.”
Kinowski said Stillwater has used the money to increase its purchases of highway equipment, to invest in capital projects and to improve parks. “You name it, we’re doing it,” he said.
Town tax bills normally must be paid in January or February, but for projects assisted by the IDA, businesses make their payments for the entire year in September, after their school tax bills are received.
Since it is new money, Kinowski said he can’t complain about receiving payments later in the year.
Even though the IDA is involved, GlobalFoundries pays the equivalent of a full tax bill on its computer chip factory and the surrounding 223 acres of land, about a quarter of which is in Stillwater.
The company’s property taxes are reimbursed by New York state under the Empire Zone economic incentive program. The Empire Zone program expired in 2010, but companies that started under it, including GlobalFoundries, continue under its terms.
Officials in the Burnt Hills-Ballston Lake, Shenendehowa and Saratoga Springs school districts have at times expressed frustration that GlobalFoundries impacts their student enrollments and demand for services but they do not receive any tax money from the chipmaker.
The size of the PILOT sums is based on an assessment settlement reached between Malta and GlobalFoundries last year. Under it, Fab 8 this year is assessed at $649 million.
Only the building is taxable, not the manufacturing tools that are the bulk of GlobalFoundries’ $7 billion investment.
The current assessment doesn’t include the $2 billion Technology Development Center now under construction, which won’t be finished until next year. The company is also contemplating building a second factory that would be larger and more expensive than the first.