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Archive for Sunday, January 29, 2006

Abatement earned

A tax abatement approved last week is a good deal for both the city and a loyal local employer.

January 29, 2006

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The Packerware property tax abatement approved Tuesday night by the Lawrence City Commission is about as close as it gets to a sure thing.

The company was founded in Lawrence and has been a steady contributor to the local job market and tax base. On Tuesday, Packerware officials showed their good faith and community spirit by adding to the deal an annual payment of $12,000 to the Lawrence school district, which an analysis had shown would receive the least benefit from the project. City and county officials had agreed to transfer part of the tax revenue they received from Packerware to the school district, but the additional payment agreed to Tuesday will make that unnecessary.

The 90 percent tax abatement was unusually high, but a $118 million expansion project is unusually large. A state economic development official said it was the largest single business investment he had worked with in the last five years, a period that included 50 companies in an 18-county region. Lawrence should be proud of the confidence Packerware has shown in the city and its local operation.

The concerns expressed by City Commissioner Mike Rundle, who cast the only vote against the tax abatement, seem misplaced. Packerware has indicated the local plant expansion could result in 154 new jobs by 2010, but Rundle was upset that about half of those jobs would pay an average of $10.50 per hour, just above the city-mandated "living wage" for tax-abated companies of $10.06 an hour. Leveling criticism at a company that had more than met the city's living wage requirement seems churlish and unfair.

Rundle also argued that it was unlikely that a lesser tax abatement would have killed the local Packerware project. "I think the firm has a substantial investment here that they're not going to walk away from," he said.

Maybe so, but maybe not. Does the city want to gamble on losing one of its most solid employers? A plant that isn't growing is always a candidate for downsizing. If the Packerware expansion project had gone elsewhere, operations in Lawrence might have gone unchanged for a time. But over the long haul, it seems likely the company might choose to focus its efforts in a more friendly business atmosphere and diminish its investment in what could become a stagnant Lawrence plant.

As the state economic development official pointed out this week, new manufacturing projects, either new plants or plant expansions, are few and far between in the United States these days. Lawrence should be proud of its support of a strong existing business like Packerware.

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