Shelbyville Common Council members have granted a tax abatement for a local company, but not without a lengthy discussion on the value of doing it.
The council voted 6 - 1 to approve a request by Plastic Moldings, 1451 S. Miller Ave., for a tax abatement on $362,324 worth of new equipment.
Dale Turner of PMC told the council the machinery is needed to manufacture a new product line for an existing customer, and the project will create two new jobs.
While praising the company for a good business decision, Councilman Brad Ridgeway (R - 4th Ward) questioned the need for the abatement and voted against it.
“There’s no clawback provision,” Ridgeway said.
A clawback is a clause in the agreement that would require the company to pay the city the full amount of property taxes owed if the firm was to shut down or move to another community.
During the council’s premeeting, Ridgeway also questioned the abatement and Councilman David Carmony (R - 2nd Ward) said he’d like to see the percentages in the abatement agreement quantified with hard numbers.
PMC’s abatement is for 10 years, with 100 percent of the property value abated the first year. That amount decreases by 10 percent each year after – 90, 80, 70 and so on – until the company pays taxes on the full property value in year 10.
Mayor Tom DeBaun said the city has to compete with other communities granting abatements and noted that some companies are now asking for 20-year “super abatements” approved by the Indiana General Assembly this year.
One thing DeBaun and Ridgeway agreed on is anger that PK USA, which has dozens of tax abatements, has contested the company’s assessed property value in order to reduce its tax bill.
“I’m with you on that,” DeBaun said to Ridgeway.
In other matters, the council:
• Approved a five-cent per $100 of assessed value property tax levy for the city’s cumulative capital development fund, an existing tax which has to be renewed each year.