Tax abatements are regular tools cities and counties use to try and lure and keep businesses in their communities. Sometimes they are offered just on the real estate. Sometimes on the machinery a company will use and on some occasions on both the land and the equipment. The Daviess County Council wants to keep better track on the abatements it has approved in the past.
“Companies that receive abatements are required every year to file a CF-1 form,” said Council President Jo Arthur. “We have several open abatements with companies that have failed to file that paperwork.”
The CF-1 form basically lays out the work the company has done and how it is progressing toward meeting the targets for things like hiring additional employees. “This is an update,” said Arthur. “It tells us if they are in compliance with the things they said they would do.”
Daviess County first began offering tax abatements in 1998 and since then has approved 29 of them. Of those 16 are still in place while the other 13 have run their course and closed. Of those that are still receiving the tax break only a handful have filed the form on a regular basis. “This is information we need to know,” said Arthur. “We are supposed to evaluate these and determine whether they should continue.”
The council intends to get with County Attorney Grant Swartzentruber and draft letters that are to be sent out reminding the firms of their obligation. “If you are giving them a real benefit then they need to follow up with the information,” said Swartzentruber.
“I don’t think there is a big problem,” said Arthur. “I think it is more a case of out of sight, out of mind.”
While the council is trying to get its information in line on current abatements, they are dealing with an uncertain future on what that economic development tool may look like in the future. The Indiana General Assembly is still debating a proposal by Governor Mike Pence to totally eliminate the business personal property tax. Cities, counties and schools have all opposed the proposal. It has gone through both the Indiana House and Senate and undergone several changes. The final bill is expected to be one of the final items passed by the legislature.
“We really won’t know what it will look like until the final day,” said Arthur. “That’s when they will work out all of the compromises and counter proposals and come up with the finished product.”
One version of the bill would leave future business personal property taxes up to local governments. Other proposed changes would eliminate the tax on only small businesses. “That sure does make it awfully complicated,” said Arthur.
The bottom line is that most local government agencies do not want the state messing with something that affects the local bottom line. “I just see no reason for this,” said Arthur. “Indiana is already in a strong position when it comes to attracting business and industry. I am afraid it will wind up coming back onto the backs of the local taxpayers. It’s like the old saying goes, if it ain’t broke don’t fix it.”