Standard-Examiner: Cities, Counties Take Back Tax Breaks

Something which our new city council may wish to ponder as it considers Hizzonah's latest round of proposed subsidies to companies to come to Ogden

By Curmudgeon

Since not much else seems to be going on just now, thought I'd mention an interesting article in Sunday's Standard-Examiner paper edition [not on the free website]. Seems that cities across the country are beginning to "claw back" tax breaks they gave to companies to bring jobs in:

• Cities, counties take back tax breaks

From the Associated Press story:

Cash-strapped communities have a message for corporations that promised jobs in return for tax breaks: A deal’s a deal.

As the economy sputters along, municipalities struggling to fix roads, fund schools and pay bills increasingly are rescinding tax abatements to companies that don’t hire enough workers, that lay them off or that close up shop.

For example, DeKalb County, Ill. granted tax abatements to Target to come in and create 500 jobs. Target fell 66 jobs short, and the County just informed Target that it's next tax bill is going up $600K because it didn't fulfill its agreement, with half the money going to the cash-poor schools.

And, the story says, cities are now writing tighter tax abatement package agreements to make sure the companies that get them comply, or pony up the taxes they would otherwise have paid.

Finally, this interesting paragraph, which our new city council may wish to ponder as it considers Hizzonah's latest round of proposed subsidies to companies to come to Ogden, this time to rescue the moribund River Project:

What’s more, the poor economy has communities thinking about how the tax breaks they dole out will play with residents who have grown increasingly angry at the thought of anything that hints of corporate welfare....“The public is a lot more aware of tax abatements and there’s a climate of skepticism about what can be perceived as corporate handouts,” said Geoff Mc-Kimm, a member of the Monroe County Council in Indiana.

Much more detail in the story, which I thought well worth a read.