It was refreshing to see some members of the Angola Common Council stand tough with companies who were up for tax abatement compliance checks.
A few companies up for review on May 16 had not met the benchmarks they promised city leaders in order to receive tax abatement. Two council members — Kathy Armstrong and Dave Olson — voted against finding these companies in compliance.
Typically the companies’ missed mark was in the area of employment. Others had sloppy paperwork.
Companies had promised to hire (or retain) a certain number of people in return for getting their tax bills reduced. As a general rule of thumb, companies that receive abatement pay about half of their property or personal property tax liability over the period of the abatement, which can be upward of 10 years.
We understand that tax abatement can be a useful tool to help companies grow in the community — which is the largest area of economic development — or decide to invest in new facilities and move to Angola or Fremont or Hamilton or Orland or Ashley or Hudson or Hamilton. Or Steuben County.
These companies gamble that their expansion or relocation to Steuben County is going to prove successful based on a certain set of metrics. One of the inducements can be tax abatement.
Recently we have heard that companies are having a difficult time hiring people. Why would that be? Could it be that in the current economy — contrary to what some national political candidates might say — it is so competitive for workers that firms paying lower wages are having a difficult time hiring people?
Perhaps. For the companies having a tough time filling many positions, that might be the case. They banked on moving to our community on the premise of finding people willing to work at low wages and a government willing to reward them for doing so. And that’s not just local government, but typically Indiana government that’s more than happy to hand out tax credits and other incentives to new companies.
On the other hand, we have companies with highly skilled positions that are having difficulty filling their openings. This presents a new set of problems not caused by paying low wages. There are too many other factors involved in this scenario to write off to a healthy economy and competition for quality employees.
This, perhaps, is why our Steuben County Economic Development Corp. is working on a facility that will up the skill levels locally. This is why we have the Angola Training Center that aims to do the same. This is why Trine University is working to instill knowledge that will improve the workforce.
Unfortunately, often we witness an Angola Common Council that is willing to look the other way when companies do not meet their benchmarks for tax abatement. Armstrong and Olson took strong positions and voted no to companies that appeared out of compliance, but two is a minority.
Getting strict with tax abatement compliance should send a message: If you don’t do as promised for tax breaks, you lose them. We have seen this happen with other governmental units in the community. Approving compliance for companies that are not meeting the promises they made is sending the wrong message, one that could be more costly in the long run by attracting low-paying companies that might not be truly interested in a long-term investment in our community.