From the Washington Herald-Times:
Changes in state laws concerning tax abatements for business and industry are giving county officials more flexibility in how they use that development tool. In the past cities and counties were locked by Indiana codes into specific schedules for abatements and limited to the number of provisions they could put on those agreements. Under the new laws local governments have a lot more options."
These changes may well change the approach we take in the future when companies come to us," said County Council President Mike Myers. "I think that from here on in we'll be taking each abatement request on a case by case basis."
"The legislature's giving local governments more flexibility is a positive," said Ron Arnold with the Daviess County Economic Development Corporation. "Abatements are a tool to attract new businesses and jobs. This will allow them to craft specific packages depending on the number of jobs and the kind of investment the company wants to make in the community."
While the tax abatements can still run a maximum of 10 years the new laws allow for shorter time periods. In the past they would decline by 10 percent each year until at the end of the term the entire property would go on the tax rolls. Under the new laws the city or county could give a company as much as a 100 percent each year for that 10-year period.
"I don't think we will see everyone who wants to build demanding the maximum break," said Arnold. "They will have to be realistic enough to know that it will depend on what they offer in terms of jobs and pay as to whether they will get it."
Abatements have been a regular topic at county council meetings this fall. Maysville Enterprises received one for a $10 million warehousing expansion project. Because the company fell under the new laws the county had to review the project and officially decide how the abatement project will run. They voted to use the same schedule that had been under the old law. "That was really the agreement that we made with them," said Myers. "We thought that would meet expectations. This won't really set a precedent. The only precedent we set this fall was with the Trilogy project."
The council denied the request for a tax abatement for Trilogy. The Kentucky-based company was seeking tax breaks to construct a new nursing home along Troy Road. The council though turned it down saying it was a service business and that they wanted to limit abatements to industrial and manufacturing operations.
In the past the county has not put many stipulations into its tax abatement agreements. About the only thing they have tried to do is make certain the companies meet the employment goals they promised. Under the new law the county can put in several other stipulations that go beyond the number of jobs created. "We don't generally put in stipulations," said Myers, "but there are some we may consider in the future."
The council's discussion centered on tax abatements on real property and did not extend to equipment. Companies bringing in multi-million dollar equipment though often ask for and receive tax breaks on it. That could change next year if Governor Pence has his way. The governor's agenda for this session of the legislature calls for the repeal of the personal property tax for equipment.
"I haven't seen the governor's entire proposal," said Myers. "I'm all for lower taxes, but a lot of county's have really lost a lot of money through the circuit breakers and tax caps. Now, the question is where will the county make up that lost money? Are we just going to have to make cuts?"
- See more at: http://www.washtimesherald.com/local/x601936102/County-officials-look-at-changes-for-tax-abatements#sthash.GIYQfy4p.dpuf
