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Archive for Wednesday, June 20, 2001

Task force revisits wage issue ––— Members still undecided about tax abatement requirements

June 20, 2001

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The wage debate rages on at the city's Economic Incentive Task Force.

Just a week after members decided companies with higher wages should be granted bigger tax abatements, the task force revisited the subject Tuesday -- this time trying to decide how to determine what qualifies as a higher wage.

That rounded back into discussion of how closely abatements should be tied to wages. David Smith of the Kaw Valley Living Wage Alliance argued that "living wages" should be a condition of any abatement offered.

Such a wage would pay a worker 130 percent of the federal poverty level for a family of three, or about $9.14 an hour.

"Our feeling is it's important for the tax-abatement policy to keep those workers out of poverty," Smith told the task force.

But task force member Bob Johnson, the Douglas County Commission chairman, said that shouldn't be a focus of the policy.

"I think we ought not concern ourselves at this table about issues of poverty and a living wage," Johnson said. "I think our mission should be to strengthen and broaden our tax base and in the process attract employers who will pay our people at least an average wage.

"It seems to me if we do that, we'll take a giant step toward dealing with issues of poverty and benefits."

Task force member Alan Zimmerman disagreed.

"Any time you use tax abatements, that's social engineering," Zimmerman said. "If you're so confident in the tax-abatement policy to make things better for everybody, then I don't (understand) your reluctance to include this in the policy."

But sentiment among task force members present seemed to run against a living wage clause in the abatement policy. Several noted the policy requires companies to offer an "average" wage.

"It seems to me that what we have and a living wage is quite close," said Steven Maynard-Moody, director of Kansas University's Policy Research Institute and a task force member.

Companies are analyzed to ensure they will be an economic benefit to Lawrence if they receive an abatement. Maynard-Moody said that analysis would penalize a company that has large numbers of low-wage employees.

"There's several living-wage dimensions to the current model," he said.

Task force member Keith Folkmann, plant manager at Sauer-Danfoss, a company in the East Hills Business Park that received a tax abatement when it expanded here, said his company had raised its wages to stay in competition with other Lawrence companies for workers.

"Simply creating more jobs in an employment category will drive wages up," he said.

No decisions were made Tuesday. The task force meets again at 9 a.m. July 11.

"This has been very interesting," said Lawrence City Commissioner Jim Henry, the task force chair. "It's almost a back-to-square-one discussion."

-- Staff writer Joel Mathis can be reached at 832-7126.

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