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Tax abatements get good results
YOUNGSTOWN
All three major recipients of 60-percent, 10-year real-estate tax abatements have exceeded the job-creation levels they projected they’d achieve at the midpoint of their abatement periods.
The Western Reserve Port Authority, which performs economic development work for Mahoning County, presented its findings at Tuesday’s annual meeting of the county’s tax-incentive review council.
The council said it was satisfied with the progress of the companies — FedEx Ground, McHenry Industries and InfoCision — in achieving the investment and job-creation goals under their abatements.
“In each case, they exceeded our expectations,” said Sarah Lown, WRPA’s senior economic development manager.
Tom Frost, a Jackson Township trustee, however, had a less-enthusiastic view of the tax-abatement program.
“I don’t really see how it benefits us all that much. You know it’s hurt our schools,” which are forgoing tax revenue due to the abatements, Frost said.
Having forgone the abated tax income, the township can’t afford to pave its road infrastructure, he added.
Laura Wolfe, Austintown Township fiscal officer, noted that townships also have suffered state funding cuts.
She suggested there could be “some sort of investment into the infrastructure by the companies.”
“It works great for cities because they get their income tax,” Frost said of the real- estate tax-abatement program, adding that townships can’t levy income taxes. “We have to find a way to make it work for townships,” he said of the abatement program.
“None of us are anti-business. We need business. We need jobs. But also, we need to be able to support those businesses with the infrastructure that’s required from a township,” Frost said.
FedEx Ground, whose North Jackson abatement began in 2008, projected it would create two new jobs and invest between $6.8 million and $7.9 million by the midpoint of its abatement. The small-package carrier’s job creation stood at 22 jobs in year seven of the abatement, and the company greatly exceeded its investment goal by investing $8.5 million.
McHenry Industries of Austintown, a wholesale sign manufacturer, which received its abatement in 2010, projected it would create 15 jobs and invest between $3 million and $4.2 million by the end of the first five years of its abatement. The company, which has been acquired by RSL Industries, has created 30 jobs and made a $3.6 million investment as of the end of 2014, according to WRPA.
InfoCision, a telemarketing company that received its abatement in 2008, projected it would create 200 jobs and invest between $5.25 million and $6.1 million at the end of the first five years of its abatement at its Austintown location. The company’s new job creation stood at 229 jobs in 2014, and it has invested $4.5 million, the authority reported.
It had projected the number of new jobs there to remain constant at 200 each year through 2014.
The number of new jobs there actually rose steadily from 125 in 2008 to a peak of 411 in 2011, dipping to 290 in 2012 and 295 in 2013 before dropping to 229 last year.
InfoCision’s employment figures fluctuate as it gains and loses short-term contracts, Lown said.