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Article published Mar 30, 2009 Support council By MARTY WOLFSON
The St. Joseph County Council deserves our support for passing tax
abatement bill 90-08. Led by council member Mark Catanzarite,
D-District G, members listened to all sides and drew up amendments that
substantially accommodated the major objections to the bill.
But The Tribune Editorial Board still seems dissatisfied. It noted three concerns.
First,
it alleged that the bill is too rigid. In fact, there are only three
requirements: at least a poverty wage of $8.80 an hour, an affirmative
action plan and the common construction wage. All else is optional for
a company. And the council has the flexibility to override the point
system and to determine noncompliance penalties as it sees fit.
Second,
The Tribune says that the "primary problem with this 16-page ordinance"
is that its "lengthy and complex criteria" would have "the effect of
scaring off development." But would a company considering an expensive
relocation or expansion be put off by reading 16 pages? South Bend's
ordinance was 48 pages when it passed in 2003 and 28 pages today, and
South Bend seems to suffer from no lack of abatement applications.
Moreover,
surveys indicate that tax abatements generally are not among the top
priorities for most companies in the site location decision. For
example, Paul O'Neill, former CEO of Alcoa and former President George
W. Bush's first Secretary of the Treasury, told a Senate committee, "I
never made an investment decision based on the tax code."
Site
consultants look to get the best deal for their clients, so public
policy does not necessarily coincide with consultants' recommendations.
However, it is not the case that all consultants would write off bill
90-08. At a public council meeting, two consultants' opinions were
presented by the Chamber of Commerce. One was a short e-mail message
that was indeed negative. The second was a thoughtful two-page letter
from a managing director at CB Richard Ellis. He said that compliance
with Davis-Bacon (now dropped in favor of the common construction wage)
may be problematic, but that "From an economic development standpoint,
wage thresholds (poverty wage) are a good way to show community
stakeholders that a decision by St. Joseph County to offer tax
abatements is effectively increasing the standard of living of its
residents. This is good public policy. From a site selection
standpoint, it is my professional opinion these wage thresholds should
not create any barriers to attracting desirable economic development
prospects in St. Joseph County."
Third, The Tribune contends
that the goals of an ordinance are best achieved through "negotiation"
with companies seeking abatement. However, the tax abatement process
should be based on standards transparent to the public, which needs to
know that abatements promote benefits for the community and
responsibility to taxpayers.
These are the principles that the
County Council endorsed when members voted for bill 90-08. They acted
with integrity and courage, and they deserve our appreciation and
support.
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