ELKHART — County leaders may, in the future, change the way they address tax incentives for businesses.
The Elkhart County Council reviewed compliance for eight companies that provided CF-1 Forms for continued tax abatement. Several were not approved but instead tabled and asked to come in next month to explain why their staffing or other growth targets were not met, a requirement to maintain the economic incentive.
While technically, the requirements for each company are rigidly identified, the council acknowledged that there are times where benchmark goals are only just barely not met. And oftentimes, in those situations, when a business has shown historically that they are experiencing growth, the council will approve the requested tax abatement.
But now, thanks to an anticipated decrease in tax funding, Elkhart County Council members say they might not be so quick to approve those that don’t quite meet standards.
Smoker Craft, Steel Harbor, General RV Center, Barletta Boats, QR Amazon, Dynamic Metals, Truck Accessories Group and Furrion all had CF-1 forms addressed during the Thursday afternoon meeting and most of them were immediately approved. Some were found noncompliant while others were asked to come in to explain the deviations.
“As the Legislature has continued to exempt personal property, how does that play into this?” asked Elkhart County Councilman Dave Hess. “It’s going to really start to make some dynamic changes as to how we handle tax abatement when we’re exempting huge amounts of personal property.”
Economic Development Corp. of Elkhart County CEO Chris Stager agreed and said the county and economic development will have to take a look at it.
“What I would say is if you promised jobs then you’ve better start delivering jobs because that’s what I would be looking at,” added Councilman Doug Graham.
Stager said there is consideration to redesign the scorecard used to evaluate.
“If somebody is on the border and let’s say they’ve got a big personal property tax exemption and they’re like ‘Well I need to keep my headcount up to keep this exemption,’ but now we’ve raised the cap, if you’re going to make a wise business decision, lay the people off. That’s the incentive that’s been given. That’s another concern we’re going to have to worry about,” said Councilman Steve Clark, who was worried that companies that don’t meet parameters would be more likely to lay off.
IN DEFENSE OF NONPROFITS
Elkhart County Commissioner Brad Rogers requested a transfer from the Landfill Operating Fund of $300,000 and subsequent appropriation of the funds for annually occurring grants to Center for Healing and Hope, Center for Community Justice, and Child and Parent Services. Each of the nonprofits receives $100,000 from the county to support their missions.
Rogers preemptively commented regarding potential conflict of interest regarding his tenure on the board for the Center for Community Justice.
“As elected officials, we are not prohibited from sitting on volunteer boards, as many of you do,” he said.
He said that he also sits on the board for Oaklawn, where the county gave through Opioid Funds, $500,000 for the crisis center. Rogers asserted that he has no pecuniary interest nor does he profit from either agreement.
Elkhart County Councilman Adam Bujalski said he’s supported by sitting on the boards, Council on Aging and Child and Parent Services for many years. He also said he asked CAPS how much the county would be responsible for if the nonprofit did not provide the support. For the CASA program, it costs $344,000 and for the forensic interviewing program it costs $335,000.
“We all know that they do things much smoother and with a tighter budget than we do and it would be close to $700,000, for our $100,000 that we’re giving to CAPS,” Bujalski said.
Bujalski said the donations ultimately save the county tons of money for state-mandated initiatives that the county would otherwise be responsible for if the nonprofits weren’t already taking them on.
Other councilmen also commented, agreeing with the sentiment.
Several audience members did not agree entirely, specifically with the usage of the money from the landfill funds.
“We’re at the point now with the state government where we’re going to have to tighten our belts pretty good; that means everybody’s going to have to kick in,” Goshen resident Glenn Null said. “I’m kind of curious as to how much more profit they have someplace.”
Null said he wasn’t opposed to donating the money, but he questioned how much money from the landfill budget is necessary as a “slush fund” that could be appropriated to the general fund.
Councilman Doug Graham said that the methane project, where the county will be selling the methane generated at the landfill to NIPSCO, will offer significant income sent to the general fund.
Elkhart County resident Cindy Hajicek, however, expressed her concern for the public-private partnerships overall, as compared to simple grant opportunities. She requested of the council to sign a form she brought in to disclose financial interest for the landfill grants.
The council noted that they already abide by state regulations for disclosures and said, while they could have the legal department look over the form, there was concern about whether or not secondary forms could be problematic.
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