Thursday, September 18, 2014

Goshen adopts tax phase-in policy

Posted on May 21, 2013 at 1:00 a.m.

GOSHEN — The Goshen City Council became the first governmental body in Elkhart County to adopt a uniform policy for tax phase-ins when it passed the ordinance Tuesday night, May 21.

The Elkhart County Intergovernmental Forum recommended governing bodies within the county to work toward establishing a policy and standards regarding property tax abatements and applications.

Tuesday was the first time the policy went before a governing body for consideration, but the policy will be reviewed in the near future in Elkhart, Nappanee and other towns and cities in the area.

Mark Brinson, the director of Goshen’s Community Development Department, said there were three goals in setting up a county-wide policy for tax phase-ins.

The overarching goal was to deal with abatements in a uniform way that would feature a single application, fee structure and general policy.

The second goal was to make sure tax increment financing (TIF) revenues were not negatively affected.

“TIF revenues are becoming more and more important as a way of funding infrastructure and we look at that as economic development in Elkhart County,” Brinson explained.

“We were very concerned about tax abatements in TIF areas because what happens is every dollar that we forgive in taxes is also a dollar we lose in TIF revenues.”

The final reason local governments came together on the policy was to examine wages in the county and how they could work to help businesses looking to add higher-paying jobs.

“The consensus is that we can do a better job of using this tool ... to incentivize and encourage higher-paying jobs,” Brinson said.

He added that during the recession, the council had been a bit looser with phase-ins, but with more jobs returning to the area, the policy would hopefully encourage adding jobs with higher wages.

Nearly the entire policy will be standardized throughout the area. A $750 filing fee will be applied for each property application. Phase-ins will not be approved in TIF districts.

The group of governmental bodies also agreed that phase-ins would only be approved if at least 70 percent of the new jobs created would be above the Elkhart County median wage benchmarked for “Total, All Occupations,” as noted by the most current statistics.

Councilman Ed Ahlersmeyer did not agree to the 70 percent statistic, saying he felt that might hinder start-up businesses from locating to the city knowing they would likely not be able to meet that benchmark.

“We’re not requiring businesses to have higher-paying jobs,” councilman Everett Thomas countered. “It’s only if they want a favor, if they want a break.”

“I think if a company is getting public money, that it’s okay to have some stricter guidelines,” councilman Jeremy Stutsman added.

Local governments will possess the ability to grant exceptions, though they might be different from municipality to municipality.

Goshen’s policy would allow exceptions if a project would diversify the current economic base, encourage entrepreneurial activity or produce jobs at any time the unemployment rate of Elkhart County exceeds 10 percent.

Essentially, the council is able to grant an exception if it feels the city would benefit from accepting a project that wouldn’t normally be accepted.

Goshen Chamber of Commerce President Dave Daugherty noted that the existence of exceptions does give the council flexibility and said the policy was sufficient in the eyes of the chamber.

“This doesn’t tie our hands, but it does help to show people we’re looking for ... slightly higher-paying jobs to get this area a little stronger,” Stutsman added.

“I think it’s very important that if we’re giving public money, these need to be jobs that are at least the medium wage,” councilwoman Julia Gautsche said. “That’s community friendly.”

Several council members also reiterated their interest in examining the number and performance of phase-ins already on the books.