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Archive for Wednesday, November 18, 1992

CITY PANEL STUDIES REPEAT TAX BREAKS

November 18, 1992

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Lawrence city commissioners decided Tuesday to study the pros and cons of granting more than one property tax break to a single company.

Commissioner John Nalbandian said this morning that he didn't feel businesses should rely on tax breaks from city government to stay competitive.

"I don't think it's the role of government," he said. "There are some unusual circumstances, but I think normally decisions should be made by a business without considering whether they are going to get a tax reduction from the city."

The purpose of the city's tax abatement policy is to attract businesses considering moving to Lawrence, or to stimulate local businesses, he said.

The city generally grants 50 percent property tax abatements over a 10-year period.

"I think the question is . . . how far do we go before we say that's enough," Nalbandian said Tuesday during the city commission meeting. "Maybe it's an unlimited number or maybe it's a fixed number . . . I don't know."

COMMISSIONER Bob Schumm also said he was interested in an answer.

"I'm getting a number of comments from the public asking `Why do you keep granting tax abatements to the same companies,'" Schumm said.

Schumm told the Journal-World on Tuesday that he felt officials should keep in mind the burden created on other taxpayers when tax abatements are granted to businesses.

Commissioners agreed to first forward the question to the Lawrence-Douglas County Economic Advisory Council, a body that advises the city and county on economic development issues and helped develop the city's tax abatement policy.

City Manager Mike Wildgen said the board meets quarterly. He expected the next meeting to take place in January.

Commissioners agreed to study the issue, but the concept of limiting tax breaks to companies was not welcomed by all commissioners.

MAYOR BOB Schulte said he didn't want to penalize companies with plans for growth that could benefit the community with new jobs.

"It's a little short-sighted to say, `Well, you've had six (abatements) and you're at your limit, so you can't benefit the community,'" Schulte said.

Nalbandian broached the topic after commissioners sent a tax abatement request from Packer Plastics Inc. to the city's Administrative Review Committee for their recommendation.

Packer already has received a $4 million tax abatement from the city in June. When he introduced the issue of limits on repeat requests, Nalbandian said he was not referring specifically to the Packer request.

Packer requested $3.5 million in industrial revenue bonds to finance a new venture that would market new products directly to consumers.

The company would use $2 million of the IRBs to buy the former Aeroquip Corp. building, 2901 Lakeview Rd., to house the venture.

Packer would use the remaining $1.5 million in IRBs to purchase equipment needed for the venture. The company requested a 50 percent tax abatement on the equipment over 10 years.

Commissioners set a Dec. 15 public hearing date to consider the ARC's report.

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