Councilman questions rules for tax abatement
July 28, 2016 at 4:25 p.m.
City councilman Joe Thallemer asked for discussion on the city's tax abatement regulations Monday evening.
After introducing the same issue during a Feb. 21 City Plan Commission meeting, Thallemer questioned whether Warsaw should better police abatement processes for accountability purposes.
"I'm not trying to discourage development in any way, shape or form," Thallemer said. "I just want to make sure (companies) are doing what they said they would up front."
To be approved for a tax abatement and receive decreases in taxes collected for a certain amount of years, companies present investment plans before the plan commission and city council. Analysis of property and equipment purchases is then evaluated, as well as the expected number of new hirings the company foresees.
The first year of abatement tends to be the largest tax reduction for companies, which decreases in following years. Thallemer said it was important to make sure companies follow through with the abatement requirements.
Though Warsaw has never experienced an even questionable case of abatement fraud, the option of retrieving funds from companies that failed to meet abatement standards was addressed.
"The thing I'm concerned about is compliance," Thallemer said. "I think we need to be responsible for our taxpayers, who are the ones losing tax revenue because of these decisions."
The idea of recollecting abatement funds didn't sit well with all council members.
"To say we're going to recollect funds doesn't sit well with me," Jeff Grose said. "These aren't hairbrained ideas coming before us. These are legitimate business people looking to create or expand their venture.
"The abatement money is a small amount compared to the ripple effect of what these companies bring to the table."
The council's goal for tax abatements is to encourage companies to stay and reinvest in the community. According to their theory, if one company flourishes, the success will "ripple" to other local companies.
While councilman Charlie Smith backed the current process of abatement evaluations, he understood Thallemer's concern for accountability.
"Sometimes it's best to stay ahead of the game and keep the future in mind," Smith said. "If we have a concern, then we need to look at the abatement history and see the activities the city has seen."
City planner Jeremy Skinner was asked to collect information on companies approved for tax abatement. A further discussion will come before the council after the results are considered.
The board also:
• Approved an ordinance amending traffic control ordinances within Warsaw. A major change will be the speed reduction on Parker Street/Husky Trail from 45 mph to 35 mph.
• Approved an $8,500 police pension secretary bond for Perry Hunter. Hunter will soon be assuming the role of pension secretary for the Warsaw Police Department.
• Approved a decision to allow $182.25 to roll over into the 2006 Facade Grant Account managed by the Warsaw Community Development Corp. The amount had remained unused from the 2005 account.
Present for the meeting were Wiggins, Thallemer, Grose, Smith, Jerry Patterson, Bob Morrison and Bill Rhoades. George Clemens was absent. [[In-content Ad]]
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City councilman Joe Thallemer asked for discussion on the city's tax abatement regulations Monday evening.
After introducing the same issue during a Feb. 21 City Plan Commission meeting, Thallemer questioned whether Warsaw should better police abatement processes for accountability purposes.
"I'm not trying to discourage development in any way, shape or form," Thallemer said. "I just want to make sure (companies) are doing what they said they would up front."
To be approved for a tax abatement and receive decreases in taxes collected for a certain amount of years, companies present investment plans before the plan commission and city council. Analysis of property and equipment purchases is then evaluated, as well as the expected number of new hirings the company foresees.
The first year of abatement tends to be the largest tax reduction for companies, which decreases in following years. Thallemer said it was important to make sure companies follow through with the abatement requirements.
Though Warsaw has never experienced an even questionable case of abatement fraud, the option of retrieving funds from companies that failed to meet abatement standards was addressed.
"The thing I'm concerned about is compliance," Thallemer said. "I think we need to be responsible for our taxpayers, who are the ones losing tax revenue because of these decisions."
The idea of recollecting abatement funds didn't sit well with all council members.
"To say we're going to recollect funds doesn't sit well with me," Jeff Grose said. "These aren't hairbrained ideas coming before us. These are legitimate business people looking to create or expand their venture.
"The abatement money is a small amount compared to the ripple effect of what these companies bring to the table."
The council's goal for tax abatements is to encourage companies to stay and reinvest in the community. According to their theory, if one company flourishes, the success will "ripple" to other local companies.
While councilman Charlie Smith backed the current process of abatement evaluations, he understood Thallemer's concern for accountability.
"Sometimes it's best to stay ahead of the game and keep the future in mind," Smith said. "If we have a concern, then we need to look at the abatement history and see the activities the city has seen."
City planner Jeremy Skinner was asked to collect information on companies approved for tax abatement. A further discussion will come before the council after the results are considered.
The board also:
• Approved an ordinance amending traffic control ordinances within Warsaw. A major change will be the speed reduction on Parker Street/Husky Trail from 45 mph to 35 mph.
• Approved an $8,500 police pension secretary bond for Perry Hunter. Hunter will soon be assuming the role of pension secretary for the Warsaw Police Department.
• Approved a decision to allow $182.25 to roll over into the 2006 Facade Grant Account managed by the Warsaw Community Development Corp. The amount had remained unused from the 2005 account.
Present for the meeting were Wiggins, Thallemer, Grose, Smith, Jerry Patterson, Bob Morrison and Bill Rhoades. George Clemens was absent. [[In-content Ad]]