PrintPack has requested a tax abatement from the Council – really, from the taxpayers of Monroe County. The property in question is on West Vernal Pike, west of Curry Pike. Both the Chamber of Commerce and the Bloomington Economic Development Corp have suggested we approve it. The first vote – taken over a week ago – showed most of the Council agreed (5-1 vote, with my vote as the sole ‘no’ vote).
The property in question is within the boundary lines of a TIF (tax incremental finance district). This means that all property and personal (in this case equipment) taxes do not go to County General, they go to the TIF’s fund. The money is used for improvements in infrastructure development. In fact $900,000 was spent from this TIF’s fund to build a road and bring utilities and sewer service to the property PrintPack purchased for their building.
A tax abatement would allow the company to pay nothing in taxes in year one, and then gradually increase to 100% payment of taxes within 10 years. Again, any tax dollars paid in a TIF go to the TIF, not to the County’s General Fund.
Tax abatements – even outside of a TIF – are problematic. A company will claim that they will leave the area if they are not granted a (major) relief from their taxes. Who are we competing against? The threat may be real or imagined. And why do we then blame the government if a company leaves? Isn’t the company responsible for the decision? A tax abatement is a legal form of extortion.
Why the ‘no’ vote? Here are my top five reasons:
1. A tax abatement should not be made in a TIF. This company has already requested the benefit of a road and sewer – and received a $900,000 benefit from you, the taxpayers. A tax abatement is, in essence, a second bite of the apple. And one is enough.
2. The PrintPack situation did not come to the attention of the Council until very late in the game. The decision to tear up green space and build a new factory is presented to us as a “done deal”. The possibility of refurbishing an existing building (there are so many vacant buildings on the west side!) has been dismissed. In addition, there is an opportunity for PrintPack (or any other company in the County) to attain a low-interest loan as part of Federal Stimulus funding. This could be used to refurb an existing facility – and would save them a great deal of money. However, they want a new facility. As a result, their existing facility (within the city limits) will be abandoned and a green field will become another industrial lot.
3. PrintPack will employ the same number of people in the proposed facility as they do in the existing facility, with the possibility of adding 4 or so additional jobs. Of the 151 employees, 53 live in Monroe County. The abatement request totals $ 2.3 Million. This is a very high price to pay for 53 county residents’ jobs. And the rest of the employees who reside in other counties? This county’s residents will be paying for the jobs of other county residents.
4. Is it a coincidence that PrintPack is at the end of a 10-year tax abatement with the city? This is an old trick utilized by Wal-Mart across the country – get a tax abatement in one entity, and when that runs out, move a mile or two away – into the next entity and another abatement.
5. While PrintPack will pay nothing into County General, they will receive all of the services and benefits the County has to offer. For example, law enforcement, fire, road maintenance, etc. Let’s look at the fire department, for example. PrintPack is a manufacturer of packaging, including products like bread bags. Plastics are toxic – whether they are the air, water, or land. Will the local fire station need to spend time training firefighters on dealing with plastics as hazardous materials? Will they need to purchase new equipment? The taxpayers of this County will pay for all of this. Not PrintPack.
I think PrintPack pays their employees well and they provide benefits and bonuses. This is great. But while they have won a few awards for creating environmentally friendly products, let’s remember they are producing plastic products.
Last week, someone suggested that a ‘yes’ vote shows support for free enterprise. There is no free enterprise in corporate welfare.
I am pro-business. I own a business. I support green businesses, small businesses and those which re-use existing buildings rather than building on green space.
This is another example of our shrinking available farmland being utilized for new industrial development.
We can do better. We can do much better than this.