The Fort Wayne Journal Gazette ran an editorial yesterday criticizing the Indiana tax abatement law:
Indiana law essentially has a two-step process for abatements, the tax breaks given to businesses for new or expanded operations:Posted by Marcia Oddi at November 17, 2004 08:13 AM1. A City Council or County Council must decide a given area is suffering and in need of an economic boost. The council must vote to designate it as an “economic revitalization area.”
2. The same council must determine whether a specific business within that area qualifies for and is deserving of the tax break. * * *
In practice, city councils and county councils throughout the state have long based their decision exclusively on Step 2 – whether the business should get the tax abatement. If the answer is yes, Step 1 – the economic revitalization area – has been virtually automatic.
However, that’s not the way state law says it should be. Under current law, an economic revitalization area is “an area which is within the corporate limits of a city, town or county which has become undesirable for, or impossible of, normal development and occupancy because of a lack of development, cessation of growth, deterioration of improvements or character of occupancy, age, obsolescence, substandard buildings, or other factors which have impaired values or prevent a normal development of property or use of property.” * * *
Which, of course, is clearly not true, nor is it the council’s intent to really describe it as such. The bottom line is the revitalization area definition has become meaningless. The County Council is right to take action to hasten tax abatements that would be granted anyway. * * *
The General Assembly should eliminate the obsolete requirement for economic revitalization areas in order to grant tax abatements.