Tuesday, March 30, 2010
WHAT GOOD IS IT FOR STARK COUNTY TO DO "TAX INCENTIVE REVIEWS?"
The SCPR wonders what good the Stark County Tax Incentive Review Council is anyway?
It seems as if companies who are not able to keep their commitments to produce jobs in exchange for local government real property tax breaks have little, if any, consequence for not.
Negative publicity appears to be a consequence. Is bad PR the only consequence?
And the SCPR is not the only one wondering. A Repository commenter put the question of the value of the Stark County Tax Incentive Review Council's value very well in a comment to the prime Repository article (Stark keeps tax breaks for 15 companies, but warns 3 - Kelli Young, 03/24/2010), to wit:
Note there was nary a word from any of the commissioners in Young's article.
Young said in her piece: "This is the third year of probation for Precision Component Industries and the second year for Thakar Aluminum Corp."
Well, when is enough, enough?
How about some answers from the Commissioners?
Yours truly has spoken to Todd Bosley (president of the Board of Commissioners) who says that the commissioners understand that the depressed economy makes it hard for tax-rebate receiving companies to deliver on their promises to create jobs.
Bosley says that in agreements with companies there is "callback" language giving the county the right to seek return of part or all of the tax monies lost. Moreover, said he believes that the county retrieved monies from a non-complaint company last year.
The SCPR did check with Mary Lee Sponseller of the Stark County Regional Planning Commission on these agreements which are entitled Enterprise Zone Agreements (EZA).
Sponseller says that about three years ago, officials amended the program service phase of the agreement to include what Commissioner Bosley identifies as "callback" language. This language, according to Sponseller, requires a payback of "forgiven taxes" by recipient companies on new/expansion buildings, if the company does not create/retain an average of 75% of the promised jobs over three years. However, the three years only begins once the "effective date" of the agreement as articulated in the agreement itself is reached.
There are about 16 EZAs with only about half of them affected by the "callback" provisions.
There is a Sponseller qualification to Bosley's point of retrieving money. She says no money has been collected, but efforts to do so are progressing.
Sponseller points out that "terminating" EZA is still a viable option and cites the termination of an EZA with GE Capital several years ago. She also remembers at least one other termination.
While the SCPR supports the EZA concept as judiciously applied, there does come a day when it becomes clear that the purpose of a given EZA is not being realized and that such agreements need to - in the interest of Stark's taxpayers - be terminated and "forgiven" taxes repaid to the county treasury.