FORT WAYNE – Fort Wayne and Allen County have a new property tax break policy for businesses making new investments.
The City Council and County Council approved the changes Tuesday after about nine months of work by a joint city-county committee to improve the system and make them nearly identical.
The new system uses a more extensive points scheme to create larger rewards for companies that create more and better-paying jobs.
There just was not an emphasis on job creation, City Councilman Russ Jehl, R-2nd, said.
A retained job was worth as much as a new job.
Under the new policy, higher-paying jobs are worth more points, as are jobs with good benefits. The more points a project scores, the longer it takes for the taxes to be phased in. Previously, there were only seven-year abatements and 10-year abatements; they can now be for as little as three years.
The abatements also have a new name: Tax abatements is out, while tax phase-ins are in because it better reflects what is happening, officials say. The increased property taxes that would be charged on new equipment or buildings is phased in rather than hitting all at once. The original property taxes continue to be charged.
Theres a lot of misunderstanding out there with the word abatement, County Councilman Roy Buskirk, R-at large, said. There is no refund of the current taxes paid on that property; (the phase-in) only affects the assessed value of new investment or equipment.
The county approved 16 abatements in 2011 and eight in 2012. The city approved 37 in 2012 and three before Tuesday.
The two entities had been competing against one another when trying to attract new businesses and offer incentives, said Nicole Liter, an Allen County economic development specialist. Now the incentives are the same.
Although the policy addresses compliance, the main requirement of filing a statement of compliance form each year to assure the company is keeping up with its promises of new jobs, existing jobs and age and benefit scales will remain the same. In order to promote compliance but protect confidentiality for businesses, an extra step will be added that will allow a follow up on the initially proposed new and existing jobs.
City Councilman John Crawford asked whether there is a way to know whether the tax breaks are actually enabling investments that would otherwise not take place, or simply rewarding those that would happen anyway. Elissa McGauley, abatement specialist for the city, said there is no way to ever know, but the new system is an improvement over the current one.
The City Council approved its annual contracts with the Fort Wayne-Allen County Economic Development Alliance and the Northeast Indiana Regional Partnership for $250,000 and $125,000, respectively.
City Council members also finished the tax abatement process for Press-Seal Gasket Corp. and Accelerated Tanks and Trailers.
Accelerated Tanks and Trailers plans a $4.2 million investment that will create 277 full-time jobs.