TAX ABATEMENTS Discussion topic: companies that fail to meet hiring goals

The review board commended nine companies for exceeding their goals.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- City officials will talk about rolling back part of tax breaks given to companies that don't meet promised goals on jobs or investment.
The city's Tax Incentive Review Council spent much of its meeting Monday talking about what to do about such companies.
About a dozen of the 53 companies that had city tax abatements in 2003 failed to meet promises on job creation or investment in real or personal property.
In 2003, the businesses combined created 1,042 of 1,524 jobs promised. The companies invested $232.9 million in real and personal property, exceeding the promised $207.5 million.
Mahoning County Auditor George Tablack, who became chairman of the review board this year, wants some guidance from city council.
Tablack wants council's thoughts on using the state law letting cities reduce the percentage of tax abatements for failure to meet promised goals. Tablack said he needs a council-set standard to follow as the review board decides how to proceed.
The review board makes recommendations to city council, which decides on granting, changing or revoking tax breaks.
Past action
In past years, the review board usually has recommended to council that businesses short of job or investment goals have their tax breaks extended anyway. Some companies have been placed on probation.
Usually, only companies that shut down have had their tax breaks revoked.
Tablack said cutting the percentage from the typical 75-percent tax break for companies that fall short is a matter of equity.
It's hard to justify letting a few companies pay lower taxes without reaching their goals when many other businesses operate and expand without any breaks, he said.
The state-mandated review committee is merely a rubber stamp and a waste of time if it doesn't exercise judgment on companies that don't fulfill their agreements, Tablack said.
Bozanich's stance
Tablack and Finance Director David Bozanich, who negotiates many of the city's tax breaks, spent about 45 minutes debating the issue.
Bozanich said companies should be allowed to keep their incentives if they are doing their best to comply.
The city uses tax breaks to lure companies that otherwise wouldn't locate there, he said. The many jobs those companies provide are better than none, Bozanich said. Tax breaks originally were meant to boost economically depressed urban cities, Bozanich noted.
All companies would like to meet their goals but have a variety of reasons why they can't, he said. Some, such as those in the metals and manufacturing fields, have seen downturns in their industries since they received the tax breaks, he said.
Conversely, the review board also took up companies that exceeded their promised job and investment numbers.
The review board sent commendation letters to nine companies that exceeded their promised job creation or investment goals.
The board pointed to four -- Coronado Steel Co., D & amp;L Energy Inc., Exal Corp. and Fireline Inc. -- that have expanded and exceeded their goals on multiple tax breaks.
rgsmith@vindy.com