JASPER — Jasper’s tax abatement program could see some changes in the next few months, depending on a Common Council decision Wednesday night.
The Economic Development Commission recommended changes to the program at its regular meeting today. The program allows companies to phase in property tax payments on new investments for up to 10 years and has been around since October of 2011.
Commission chairman Andy Seger said that while changes were recommended, they wouldn’t significantly change the program.
“I think the core of the program will remain intact as is,” he said.
The biggest recommended change caps the abatement for personal property, such as new equipment, at five years, rather than the previous 10 years.
Seger said that change was suggested because equipment tends to depreciate in tax value over a shorter time than real property. The abatement on real property, such as land and buildings, will still be capped at 10 years.
The commission did not recommend adopting the state’s super abatement program, which allows abatements to last up to 25 years.
“We believe 10 years is fair and adequate and (has) worked well,” Seger said.
Other changes are to the scoring system, which looks at the aspects of the project to determine how much of an abatement the company may get and for how long.
The commission recommended eliminating the bonus points for employee health and retirement programs and the use of green technology because those have become the standard in the city anyway.
In exchange, the bonus point system will put more emphasis on using local contractors and for innovation and diversification of technologies used. Bonus points will still be awarded for using vacant buildings.
The commission also recommended using one application for both existing and new businesses. Previously, two separate applications were used, but the commission doesn’t think that’s necessary.
The group also recommended updating the wage threshold to be well above minimum wage to encourage companies to create high-paying jobs and to add an option for businesses to be scored based on job retention rather than job creation “which we really view as equally important to creating new jobs,” Seger said.
Seger acknowledged that most of the applicants would focus on job creation, but he said there have been a couple major investments during the program’s life that retained jobs rather than created them.
Commission members and Mayor Terry Seitz stressed that the city does not lose money on tax abatements. Since abatements are reserved for new investment, the city does not give up any current tax revenue when it grants an abatement. Rather, it doesn’t gain tax revenue as quickly as it would without an abatement. Still, the city gains revenue that it would not have if the investments didn’t happen, and a tax abatement program encourages companies to invest in Jasper, Seitz said.
Commissioner Mark Schmidt agreed.
“We don’t have this money now, and if they don’t expand, we won’t get the money,” he said.
In the last six years, the program has resulted in $81,753,871 of new investments in Jasper and 437 new jobs with roughly an additional 200 jobs to support the 437, Seitz said