Reply #19: Layoffs prompt tax-aid inquiry

[UpInArms]

http://www.berkshireeagle.com/Stories/0,1413,101~7514~2810134,00.html

PITTSFIELD -- The city has sent a letter to J&L Fiber Services, which recently cut half its work force here, to determine if it has lived up to the terms of a special tax assessment granted in 2000.

About a dozen production workers at the J&L facility at 14 Federico Drive were told March 31 that they were being let go as of the next day. One worker, who asked to remain anonymous, said employees were presented with a letter stating that the business "has not been profitable" because of current market conditions, "necessitating an indefinite reduction in work force."

The workers were given severance packages based on their length of service. The former employee who spoke said that six production workers and five managers remain. He predicted that the company eventually will close. He said remaining workers were offered bonuses to stay on for six months.

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In May 2000, the city granted the company a special tax assessment, allowing it to pay up to its full property tax bill in stages. The company was exempted from property taxes in fiscal 2001, the first year of the agreement, and was then required to pay in 25 percent increments over the next four years up to 100 percent. It reportedly saved $168,000 in taxes the first year.

In return, J&L pledged to meet certain job-creation and capital improvement targets, and to report annually to the state, which allows a 5 percent investment tax credit in such cases, and to the city on its progress in meeting those targets. The agreement expires June 30.

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Based on what has been reported about the layoffs, Kerwood said, J&L would appear to be short of its employment target for fiscal 2005. However, the philosophy behind the tax program, he said, is not to punish a company that is adversely affected by market conditions. In such cases, the city has the discretion to decide whether a company no longer is eligible for the tax break.

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