Report reviews tax breaks

City commissioners may weigh value of wage data

On this much they agree: The 2006 Tax Abatement Report will be sent to City Hall for formal acceptance May 1.

But members of the city’s Public Incentives Review Committee – who advise Lawrence city commissioners about companies’ applications for tax breaks – don’t always arrive at the same conclusions regarding the report’s contents.

Monday morning, four of the committee’s seven members gathered at City Hall to review the report, which contains employment, wage and investment data from eight companies now receiving city-endorsed tax abatements on buildings and equipment.

Jason Edmonds, who serves on the committee as chairman of the Lawrence-Douglas County Economic Development Advisory Board, noted that companies receiving tax breaks, as a whole, had exceeded their own original projections for employment – by 144 full-time employees and 93 part-time employees, according to the report.

“The bottom line is that when you look at these numbers cumulatively, it’s pretty remarkable,” said Edmonds, a vice president and financial adviser with Morgan Stanley in Lawrence. “We’re very pleased with that number.”

But Kirk McClure, another committee member, came up with a different conclusion: Three of the eight firms actually fell short of substantial compliance in terms of employment, and four failed to meet wage levels required by the city’s tax abatement policy.

Such performance, McClure said, is simply abysmal.

“I’ve never seen a place perform as badly as I’ve seen here in Lawrence,” said McClure, an associate professor who teaches in the graduate program in urban planning at Kansas University. “We’re wasting scarce tax dollars that we cannot afford to waste.”

McClure, an abatement critic who missed Monday’s meeting because he was teaching a class, forwarded his critique of the city’s program to committee members, who added his analysis to the record.

Mike Dever, who joined the committee after being elected to the City Commission earlier this month, welcomed McClure’s thoughts but dismissed the professor’s assertion. Tax abatements encourage companies to come to town or expand once they’re here, he said, and that’s a good public investment.

“That’s really what this is all about,” Dever said.

Both Dever and Edmonds say the report may contain too much information, particularly when it comes to wage data. Companies are required to report average wages for job categories, so that the wages can be compared with the middle-of-the-road wage paid for such jobs statewide.

Dever questioned whether the “pass/fail” aspect of such data – especially when certain employees might not fit into specific categories – is useful.

“I’d like to see us take a hard look and what kind of information we’ve asked for,” Dever said. “I don’t want to overburden companies.”

Added Edmonds: “I think we should focus a little more on the forest instead of the trees, or even the leaves on the trees. We shouldn’t go overboard. These are supposed to be incentives for people to do business in Lawrence, instead of reasons not to do business in Lawrence.”