If you have been following the City Council agenda this summer, you have probably noticed that
it has been filled with tax abatement house cleaning. I’d like to note City Council has been trying to
make the tax abatement process, also called tax phase-in process, work for you, the Taxpayer.
 
As you know, companies either building a new structure or purchasing new manufacturing
equipment for a business work with the City’s Community Development Division staff to determine if
they are eligible to apply for an abatement on their real estate or personal property project. This is an economic development incentive tool designed to attract new jobs to this community.
 
Businesses must meet eligibility requirements set forth by Indiana Code and City code. The tax
phase-in deduction schedule (up to ten years) is determined through a review system set by City
Council. This review system was recently overhauled to prioritize jobs created, investment median
wages, and percentage of business done outside of Allen County. As a result, the reforms are saving
millions of tax dollars.
 
Seventy–five percent of the agreement goals for jobs and payroll must be reached annually in
order to remain eligible for the tax relief. Each year, the business must send in financial forms to the City showing it is meeting its obligations. If the business does not do so, it is considered In Substantial Non-Compliance. To come back into compliance and continue the scheduled phase-in, the business must then explain to City Council why they are delinquent in the filing or in meeting the goals.
 
Thus, City Council has spent time this summer reviewing the non-compliant businesses. This is a
new enforcement process of which I am very proud. Previously, businesses would continue to receive
their abatements regardless of whether they were in compliance. Council now annually reviews each
abatement to certify compliance.
 
The good news is that in 2015, 270 forms from companies with active deductions were filed. Of
those 270, 255 were compliant with their agreements; 15 were non-compliant– 255/270=94%
compliance rate. I am excited that the local economy is expanding (albeit we’d like it to be expanding
more robustly) and that the vast majority of these companies are creating the jobs promised. For those
few which are not, Council is taking the time to make sure that the Taxpayer’s interests are protected.