TAX ABATEMENTS Group seeks better system

Hold companies accountable for job and investment promises, the auditor says.
By PETER H. MILLIKEN
VINDICATOR STAFF WRITER
YOUNGSTOWN -- City, Mahoning County and school board representatives have agreed that better ways must be found to assure that businesses adhere to the job creation and investment agreements they make in exchange for tax abatements.
"Unless you enforce your agreements, then why should the other companies live up to what they represented in their agreements?" asked George Tablack, county auditor. Tablack, who also is chairman of the city's tax incentive review council, spoke at a Wednesday meeting of Youngstown City Council's finance committee.
Attending the meeting were council members, the city's economic development officials, school board members and Superintendent Wendy Webb.
Exchange
The discussion centered on the city's efforts to attract and retain businesses and jobs through the granting of tax abatements. In exchange for the abatements, businesses agree to create a certain number of new jobs and make a certain amount of new investment in the city over a stated time period.
"We want to create an environment that is pro-business,'' Tablack said. He added, however, that he'd like to "write less ambiguity into our agreements and to infuse more measurement" in the performance evaluations of companies that get the abatements.
He also said he'd like to see creative ways of linking the agreements to business activity.
"If we're going to give them [companies] those abatements, we expect them to live up to their agreements," said Councilman Artis Gillam Sr., D-1st. If companies getting abatements don't live up to the agreements, then the abatements should be canceled, he said.
Jeff Chagnot, the city's economic development director, acknowledged that about 15 companies that got tax abatements have failed to meet their job creation or investment agreements.
In some cases, however, businesses have failed to meet expectations because of downturns in their industries, which were sometimes brought on by foreign competition, Chagnot said.
"You can't make generalities on over 60 companies that we currently have contracts with and throw them all in one barrel. You need to do it on a case-by-case basis," Chagnot said.
John Maluso, a school board member, said he sees the need to encourage employment and economic development, but complained that some companies that haven't lived up to their obligations "have gotten a free ride."
Included in meetings
He also asked that school board members be included in committee meetings where tax abatements are discussed.
Councilman Richard W. Atkinson, R-3rd, finance committee chairman, assured Maluso that school board representatives will be included in the discussions. Atkinson asked the city, county and school board officials to share what they learn concerning methods other communities use to achieve accountability from businesses that get abatements.
Economic development efforts have succeeded in filling the city's industrial parks, and some companies have exceeded the expectations of their tax abatement agreements, Atkinson said. "We want a win-win situation," for the city, county and school board," he said.
Two-thirds of the jobs promised under tax abatements have been created, putting the city in a better position than it was in a few years ago, observed Councilman Mark Memmer, D-7th, who suggested reducing tax abatements for businesses that don't comply with their agreements.