WARREN Most business tax breaks will remain

By STEPHEN SIFF
VINDICATOR TRUMBULL STAFF
WARREN -- Over the past 10 years, Trumbull County commissioners have granted more than 80 tax abatements for companies promising to create jobs or save them.
In the majority of cases, however, the jobs haven't materialized, or have been lost in subsequent layoffs, according to the county's annual review of tax abatements.
"Very few have been able to keep up this year," said Mark Zigmont, who manages tax abatements at the county planning commission. "Including Packard, GM, WCI -- none of them."
The planning commission will not recommend yanking tax abatements for these or any of the other companies that fell short of hiring pledges in exchange for the tax break.
"In these sour economic times that we are in, we are just happy when businesses don't close, quite honestly," said county Commissioner Joseph J. Angelo Jr.
Tax abatements have become routine for companies considering building a new plant, expanding an old one, buying machinery or increasing inventory.
Typically, local officials and county commissioners will agree to not charge a company 75 percent of the personal property taxes it would have paid on new investment for 10 years.
Agreements not to tax investments of more than $500,000 are routinely approved.
Over the past 10 years, county commissioners have approved tax abatements on well over $1 billion.
The most recent abatement for the General Motors Lordstown Assembly Plant was for $470 million.
Taxes that would have been collected would have gone primarily to local school districts.
In return for a tax break, companies promise to create, or, at the very least, not cut a specific number of jobs.
Since the program began in the 1980s, there have been companies that have expanded but not made their hiring goals. But the number of companies not living up to their promises is higher this year than ever before, Zigmont said.
Especially hard hit are companies that service the steel industry, he said.
Some companies that had been on target to add another shift of workers or increase production have instead ended up laying off workers.
Won't end program
Commissioners could end the tax abatement program, but officials say that would be the equivalent of kicking the companies when they are down and they want the companies to stay in business and thrive.
"I just hope current employees have a job," Angelo said. "Once we get through this tough economy, hopefully they will hold on to their obligation."
Of the 81 tax abatements on the books, the planning commission will recommend only the cancellation of three: Howell Industries, in Brookfield, which has closed; Lexington Precision in Vienna, which never made the planned investments; and Oakley Industries in Lordstown, which never opened.
siff@vindy.com