Saturday, January 31, 2015

Summit, NJ: As Merck Vacates Legacy Schering-Plough Facility, Tax Bill Abated

I mention this primarily because a commenter asked about it, after last weekend, when we discussed the Union, NJ vs. Kean interests fight resolution. The financial impact of these "Summit plus Union" tax savings -- to Merck is trivial to consolidated worldwide revenue (around $47 billion in 2013 -- last full year reported). The local impact however, is very meaningful -- to the good people still living, working and raising their children in these New Jersey townships -- the now largely former "medicine chest" of America. [2013 era background on moves at Summit, among legacy Organon/Animal Health staffers here. That was prior to the decision to vacate the facility.]

Merck was able to negotiate a $1.2 million reduction on its roughly $8 million 2015 bill -- to $6.8 million. That represents a decrease of about one per cent in the overall tax base in Summit, NJ. The certainty of an agreement here, is better for the locals, than running the risk of a much larger hit, after a year or more of costly litigation. Here's the relevant portion of the local news bit:

. . . .[Merck]. . . will see its 2015 tax assessment lowered by 15%, in an agreement forged between the City and the soon-to-be departing health solutions giant.

The agreement was announced at the January 30 Summit Common Council meeting by council member Mike McTernan, who heads the Council's Finance and Personnel Committee. Merck had previously fully honored their 2014 tax obligation, and the 15% reduction amounts to a loss of approximately one percent of the City's $128 million in property tax revenue, according to the First Ward Councilman. . . .

Going out to enjoy the sunshine, before perhaps eight to ten inches of white stuff falls. I say bring. it. on.

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