Editorials

  • Balancing interests of school districts
    Allen County looks to be the test case for a new state requirement for public schools to make vacant buildings available to charter schools for lease or sale for $1. That law deserves a challenge.
  • Stimulating better health
    Debates over the value of federal stimulus spending inevitably focus on job creation. But one effect in northeast Indiana is aimed at making health care more affordable, understandable and safer.
  • The courts and White
    With complex legal issues surrounding the question who will replace Charlie White as Indiana secretary of state, the Indiana Supreme Court rightly stepped into the case late Tuesday afternoon.At issue is the appeal of a Dec.
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When ugly is attractive

Something just isn’t right when a county’s main tool for attracting economic development is to declare itself unattractive.

Is all DeKalb County really “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 …”?

That’s what county officials declared when they created an “economic revitalization area” in the entire county outside Auburn and other cities and towns.

And DeKalb isn’t alone. As Angela Mapes Turner’s Monday story explained, Blackford County has taken the same action, and LaGrange is considering it. Allen County made a similar declaration for all commercial areas outside cities and towns.

Why would officials want to use such a negative description to make the county sound more attractive to developers?

The tag is needed as part of the process of making property eligible for tax abatements, the tax breaks for new or expanded structures and new equipment. Typically, buildings receive a 100 percent tax break for the first year, 90 percent the second, 80 percent the third, and so on until the tax break ends after 10 years. Equipment usually gets a break of 100 percent the first year, 80 percent the second, 60 percent the third, and so on until the break expires after five years.

DeKalb and other counties are essentially deciding that any new business anywhere may be eligible for tax abatement. Some economic development officials are saying that the countywide declaration speeds the approval process. Yet each abatement request must still be justified by the business and approved by county officials.

The tax abatements sometimes are criticized, especially when companies do not produce the number of jobs they project on their applications for the abatements. In theory, every $1 of taxes the company receiving an abatement does not pay is $1 all other property owners must pay. Advocates of the abatements explain, rightly, that there is no real loss, because the break is on new development and equipment that has never before been subject to taxes. Every $1 that it pays beginning the second year is $1 less everyone else pays.

The state and local officials could make the revitalization area designation stricter, reserving abatements for only the most needy areas. But that seems unlikely considering that abatements have become a nearly automatic way to attract investment.

The countywide declarations are proof that the “economic revitalization area” designation is unneeded and should be stricken from state law.

If every piece of property in a county is eligible – from the most accessible to transportation, utilities, workforce and customers, and most desirable for development to the least desirable – why bother with the designation?

Since the economic revitalization area designation has become ubiquitous, the state should simply do away with this unnecessary part of the process.