County council hopefuls discuss tax phase-ins, nonprofits
Posted: 10/26/2012 at 1:15 am
By: Angelle Barbazon
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Agdia's Belinda Hood moves a shelving unit full of components for the test strips the company makes to detect pathogens Feb. 4, 2011. In exchange for a tax phase-in spanning seven years, the company has pledged to invest $6.6 million in real estate improvements, and more than $1 million for new equipment and technology over the next five years. The company also expects to create 22 full-time jobs. (Truth Photo By Jennifer Shephard)
Agdia’s President Baziel Vrient talks about the company’s growth in a lab at the Elkhart facility Feb. 4, 2011. In exchange for a tax phase-in spanning seven years, the company has pledged to invest $6.6 million in real estate improvements, and more than $1 million for new equipment and technology over the next five years. The company also expects to create 22 full-time jobs.
Truth Photo By Jennifer Shephard
Agdia’s President Baziel Vrient talks about the company’s work at the Elkhart facility Feb. 4, 2011. In exchange for a tax phase-in spanning seven years, the company has pledged to invest $6.6 million in real estate improvements, and more than $1 million for new equipment and technology over the next five years. The company also expects to create 22 full-time jobs. (Truth Photo By Jennifer Shephard)
With the economy struggling to pick up, two recent issues that have grabbed the attention of council members are financial support for nonprofit groups and tax phase-ins for companies that vow to create jobs and invest in real estate in the county. Five candidates vying for three available seats on the council have a different take on those issues and how they should be handled.
John Letherman, a Republican who serves as council president, is seeking a seventh term, and fellow Republican incumbent David Ashe will be on the ballot again, seeking a second term on the council. Tom Stump, who serves on the Goshen City Council, is the third Republican candidate in the race, and there are two Democratic challengers, Mike Settles and Ralph Spelbring.
Despite some criticisms that the county council approves too many tax breaks for large companies, Letherman said the incentives play an important role in helping businesses expand and keeping them in Elkhart County.
The latest tax phase-in approved by the council was for Agdia Inc., a company that manufactures kits that test for plant diseases. In exchange for a tax phase-in spanning seven years, the company has pledged to invest $6.6 million in real estate improvements, and more than $1 million for new equipment and technology over the next five years. The company also expects to create 22 full-time jobs.
“When those people want to build additional facilities, new plants, I think it's important that we support them,” Letherman said. “We've got to remember they can go over the line in Michigan and probably get free land and free buildings, or they can go to the next county and still get a really good work force, so I think we should support the local companies as much as we can, and I think it's almost a given when folks come in from the outside.”
Spelbring said Elkhart County should be more selective with the tax abatements it approves, but Stump said he can see both sides of the issue. On one hand, Stump said Goshen has been successful filling vacant buildings in the city via tax abatements. On the other hand, he doesn't want to pit the county and the cities against each other.
Settles, however, said he doesn't like the idea of tax abatements.
“First of all, the companies that may be tempted to come here because of that usually will eventually take their profits someplace else,” he said. “The jobs that I've seen created from these companies tend to be relatively temporary jobs, so it's not something you can count on in the long run anyway.”
Instead, Settles would like to see the county offer incentives to local entrepreneurs who want to start up their own businesses or to newly launched ventures that need a little leverage to get off the ground.
Ashe views tax phase-ins as “another tool in the toolbox.” The county council, he said, considers a few things before voting on requests from companies. For example, he said, how many jobs will be created, and how many years does the phase-in cover?
“All of these things need to be taken into account, whether or not it's financially the smart thing to do for the citizens of Elkhart County,” Ashe said. “And with the way the economy has been for the last several years, any time somebody's looking at creating another 30 or 40 jobs even, and we can help out in that way, I think it's a good thing.”
SUPPORT FOR NONPROFITS
The Elkhart County Council stopped most of its contributions to nonprofit organizations in 2010. The only group that continues to receive funds from the county is ADEC Inc., which provides services for adults and children with cognitive disabilities. The county set aside $450,500 for ADEC to use in 2013. Questions surfaced among some county council members during budget hearings in September whether the contribution is excessive. Others said it is important to continue support for the organization.
Ashe said county council members carefully consider requests before designating funds, whether that's for county departments, road projects or outside agencies.
“For county government, they look at us to provide a certain number of services such as repairing roads and stuff like that,” Ashe said. “If we're at a point right now financially where we cannot provide the services that people are expecting us to provide, it's hard to step off into these other ventures when we can't even do what we're supposed to be doing financially.”
Settles said he would like to see the council continue its support of ADEC and eventually adopt other nonprofit groups when the economy improves.
“The more you can help people out when they're in poverty, the more you can help them when they're uneducated, the more you can help them out when they need health care. It saves a whole lot of tax dollars in the long run,” Settles said. “And really it just makes common sense to help out nonprofits as best as we can. Under the immediate circumstances, there's just not any money.”
Stump said the county council's contribution to ADEC is justified because the organization took over care for the area's disabled population after the Elkhart County Home closed in 1977. Support for other agencies, Stump said, should be considered if money is available.
Spelbring said the county should limit its contributions to other nonprofit groups until the economy completely recovers.
“As the economy has picked up, we're going to have money coming in from the income tax, but there's a lag on that,” he said. “The next two or three years are going to be easier to do than the last two or three.”
Another group that came to the county in recent months for a contribution was the Horizon Education Alliance, a new venture seeking to improve education by partnering with businesses, schools and nonprofit groups. Horizon asked the county to consider paying benefits for two of its top employees and later withdrew the request. Letherman said most of the council members fully supported Horizon's goals, but the timing wasn't appropriate.
“This doesn't appear to be the time to start a new department,” Letherman said. “This does not appear to be the time to start adding new employees, and I think most of us feel like we'd like to see how these folks operate for a couple of years before we consider county level support.”
All five county council candidates will be on the ballot on Nov. 6.