Cities and counties compete for incoming businesses, and try to encourage existing companies’ growth, by offering tax abatements. To more efficiently and wisely handle such offers, Terre Haute and Vigo County need to complete an ongoing effort to create an updated tax abatement score sheet.

The lack of an updated abatement score sheet cropped up this week.

On Tuesday, the Vigo County Council granted personal-property and real-property tax abatements to a proposed steel corrosion preventative plant that would locate adjacent to Great Dane Trailers on North 13th Street in Terre Haute. ZINKPOWER uses a hot-dip galvanizing process that prevents corrosion of steel.

The company is proposing to build a $25.7-million plant, furnished with $21.5 million in equipment. One-hundred construction jobs would be filled to build the plant. The eventual plant workforce would include 90 employees and an annual payroll of $5.4 million.

The council debated whether to grant ZINKPOWER the abatements before the county finishes its slow-moving effort to update its tax abatement score sheet. Several council members wanted to pause a decision on ZINKPOWER’s abatement until the updated score sheet was completed. Council member Aaron Loudermilk lamented that discussions about the score sheet update had been going on for two years.

Loudermilk brought up the same issue in a council meeting last month, also regarding ZINKPOWER’s abatement request. An abatement score sheet “that has teeth” was needed, he said.

“My concern is that some people have made promises [concerning abatements] at that podium that have not been fulfilled, and there’s little to no recourse for us as a council,” Loudermilk said in May.

An attorney for ZINKPOWER said a delay in granting an abatement could jeopardize Vigo County’s chance to land the company’s fourth U.S. plant. Ultimately, the Councilman Todd Thacker cast the deciding vote in favor of granting the abatement, concluding that ZINKPOWER should not be penalized for the county’s lack of an updated abatement assessment process.

The Terre Haute City Council has also discussed its need for a new tax abatement scoring system. The two local government entities may collaborate on developing that scoring method.

Its need is real and further delays matter. Indeed, the City Council will soon be asked to extend a tax abatement for an expansion at an existing Terre Haute plant — Great American Transportation Company, a railroad car refurbishing facility on Maple Avenue. GATX proposes $20.5 million in real-property improvements and $7 million personal-property improvements, leading to 21 new jobs with a combined $750,000 in annual salaries.

The local councils are not the only fiscal boards pondering the implications of tax abatements. As a 2020 report in Governing magazine put it, “Study after study demonstrates that when states and cities give out tax breaks to companies looking to relocate or expand, they typically get very limited bang for their bucks, if any. Yet such incentives remain central to development strategies in most jurisdictions.”

Tax abatements to attract and retain employers remain a necessary tool for Terre Haute and Vigo County economic development leaders. Taxpayers, though, deserve to know a methodical, chartable, data-driven process is being used to make decisions concerning tax breaks for corporations and businesses.