Jump to content


Photo
- - - - -

Tax Abatements: Can they be justified?


  • Please log in to reply
18 replies to this topic

#1 renamerusk

renamerusk

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 3,678 posts
  • Gender:Male
  • Location:Fort Worth South

Posted 17 May 2011 - 10:29 PM

GE Transportation could receive up to $3.3 million in a 10-year tax abatement toward the development of a $96 million locomotive manufacturing plant in far north Fort Worth, under a proposal being considered by the City Council. Read more: http://www.star-tele...h#ixzz1Mfqc1026

Justifications are being made to approve the abatement, but can the give-a-way be justified when the city if facing a projected $30m. shortfall for upcoming fiscal year; and the idea of an infrastructure tax attached to each water bill is being proposed?

Keep Fort Worth folksy

#2 Brian Luenser

Brian Luenser

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 3,047 posts
  • Gender:Male
  • Location:Downtown Fort Worth

Posted 18 May 2011 - 05:32 AM

Tax abatements can surely be justified, sometimes.

Personally, I think they are poor tools, but am in favor of them in Fort Worth. I wish they did not exist and were made illegal, but if they do exist and are legal, I want Fort Worth to be in the game. Not giving away abatements in this environment would put us at a real disadvantage. These companies would just find somebody that does subsidize their construction costs.


The theory is not completely different than gambling to me. I wish it were all illegal. But I don't want it to be only illegal in Texas for sure. I have always hated to see Texans driving to OK, NV or wherever. (Very recent story in the local paper about Texas gambling in OK) So much air pollution at a minimum. Not just from them but in the traffic they create.
www.fortworthview.com

#3 John T Roberts

John T Roberts

    Administrator

  • Admin
  • PipPipPipPipPipPipPip
  • 11,672 posts
  • Gender:Male
  • Location:South Fort Worth
  • Interests:Architecture, Photography, Bicycling, Historic Preservation

Posted 18 May 2011 - 07:39 PM

I never have been a fan of tax abatements. With our budget shortfalls, I really don't see how any justification could be made for giving one to GE Transportation or any other business.

#4 JKC

JKC

    Advanced Member

  • Members
  • PipPipPipPipPip
  • 479 posts
  • Location:Fort Worth

Posted 19 May 2011 - 05:30 AM

One problem is that most all our neighboring jurisdictions do throw incentives like this at a company. It is pretty difficult for a company to locate then in the City that is not making comparable offers. These companies are now coming in the door with site selection consultants who are basically brokering for incentives.

#5 Sam Stone

Sam Stone

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,036 posts
  • Gender:Male
  • Location:Overton, then Monticello, now expat in OC, CA

Posted 19 May 2011 - 08:00 AM

Can they be justified? Sure. But like Brian says, they are poor tools. If we got rid of all the tax abatements, everybody's taxes could be a little bit lower. And that would attract business and development, too.

One other problem with tax abatements is that you are publicly subsidizing one company, but not others (like their competition). So a good rule of thumb when doling out tax abatements is to give them only to "unique" properties like headquarters or manufacturing facilities. This is as opposed to retail where an abatement recipient likely has many non-abated competitors in the same city. At least the GE deal follows this rule. The same can't be said of other deals, like the Montgomery Plaza retail on 7th.

#6 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 26 September 2012 - 09:59 AM

The city is offering still another tax abatement to accommodate an expanding business, this one in the Alliance area, as explained in this ST article by Scott Nishimura. I'm not opposed to tax incentives, if used selectively and wisely. In this case we may well desire ATC Logistics to remain in Fort Worth, rather than move elsewhere.

http://www.star-tele...fort-worth.html

#7 RD Milhollin

RD Milhollin

    Surrounding Cities Moderator

  • Moderators
  • PipPipPipPipPipPipPip
  • 2,537 posts
  • Gender:Male
  • Location:Haltom City

Posted 26 September 2012 - 04:06 PM

Here is a short article from the Star Telegraph (not Star-Telegram) blog about publicly subsidized developments like Bass Pro Shops and Cabellas.

http://startelegraph...y-cost-you.html

#8 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 27 September 2012 - 09:31 AM

Good article about Cabela's and Bass Pro Shop. Food for thought. I agree that retail establishments masking as engines for economic development is a bit of a stretch, and perhaps they are less deserving of tax incentives. I believe ATC Logistics, being a manufacturer, has a more legitimate reason for seeking abatements. That's why I believe the city should be slectdive in extending such offers and only after a careful review.

#9 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 17 October 2012 - 07:03 AM

Still another company wants to move to Fort Worth, on condition of getting a tax abatement, as described in this Scott Nishimura article in the Star-Telegram. I know a lot of cities probably do this, but does FW particularly have a reputation that prospective businesses know about and use it for leverage? I'm no expert on the tax abatement issue, but is this a "me too" strategy?

http://www.star-tele...60-percent.html

#10 renamerusk

renamerusk

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 3,678 posts
  • Gender:Male
  • Location:Fort Worth South

Posted 08 December 2012 - 10:48 PM

Read this in the Fort Worth Business Press:

http://fwbusinesspre...SubSectionID=49

Yet another give away by the City Council; and then just after immediately approving of this blantant corporate welfare to a private real estate investment firm, the Council will then review its Ethic Codes.

"Can you believe it!"

By the way, I think that the FWBP has incorrectedly printed the address of the property seeking a tax abatement and that the FWBP will have to print a correction with apology to the German Auto Garage. It seems more likely that the actual applicant is the property at the intersection of Carroll and Weisenberger.

#11 360texas

360texas

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,427 posts
  • Gender:Male
  • Location:SW Fort Worth, Texas USA
  • Interests:Digital photography, computers since 1980, Panorama imaging, world travel. After 37 years retired Federal Service 1999.

Posted 09 December 2012 - 10:12 AM

Yes, it seems me that tax abatement is {reverse thinking here} diverting future city tax revenue to pay for city services, labor and equipment. Meaning the city will be receiving less tax receipts in exchange of the new company promising to employe more people etc.

I learned a few years ago about what happens when that company does not achieve the tasks specified in the tax abatement agreement. The company failure to perform will result in paying the required city tax revenue like they had not received the tax abatement in the first place.

Might have to follow up on the exact terms of the agreement.

Dave still at

360texas45x145.png
Visit 360texas.com


#12 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 10 April 2013 - 06:42 AM

More on the sensitive issue of local tax abatements.  These are for Walmart and a prospective beverage bottling company from North Carolina; S-T article by Scott Nishimura.  I support both proposals that have been approved by the council. I  also favor some state incentives that lure other companies to Texas from elsewhere in the country (with the possible exception of using our state's right-to-work status as leverage for luring companies in heavily unionized industries...my late father was a staunch pro-union guy).

 

http://www.star-tele...supportive.html



#13 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 15 May 2013 - 06:06 AM

This S-T article is about the Fort Worth City Council considering two tax abatements, including one for a sports facility to move from Haltom City to north Fort Worth. Obviously it would be Fort Worth's sales tax revenue gain and Haltom City's loss. But is this incentive worth it, considering that Haltom City is a close suburb of Fort Worth and it's just a sports facility?

http://www.star-tele...adlines-default

#14 renamerusk

renamerusk

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 3,678 posts
  • Gender:Male
  • Location:Fort Worth South

Posted 08 July 2015 - 07:20 AM

The latest article from the Star-Telegram says eventually more than 100 [Facebook].  They are required to have at least 40 employees per the incentive package.

 

Controversial, but what if -

 

the City levied a Fort Worth Payroll Fee upon all employees of a company that receives a public tax incentive package.  Employees who reside inside the city or who pay property taxes to the city would be eligible for a fee rebate; employees who reside outside of the city or who pay no taxes to the city would not be eligible for a rebate.

 

Would this be an equitable deal for the tens of thousand of taxpayers residing within the city's taxing jurisdiction and who are indirectly subsidizing corporations and the jobs of their workers?



#15 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 08 July 2015 - 11:03 AM

 

The latest article from the Star-Telegram says eventually more than 100 [Facebook].  They are required to have at least 40 employees per the incentive package.

 

Controversial, but what if -

 

the City levied a Fort Worth Payroll Fee upon all employees of a company that receives a public tax incentive package.  Employees who reside inside the city or who pay property taxes to the city would be eligible for a fee rebate; employees who reside outside of the city or who pay no taxes to the city would not be eligible for a rebate.

 

Would this be an equitable deal for the tens of thousand of taxpayers residing within the city's taxing jurisdiction and who are indirectly subsidizing corporations and the jobs of their workers?

 

Not a bad idea in terms of equity.  But I'm assuming you would incorporate this into future tax incentive offerings and not "grandfather" it in the plan already offered to Facebook.  .
 



#16 JBB

JBB

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 4,324 posts
  • Location:Bedford

Posted 08 July 2015 - 01:45 PM

It would probably be better for businesses in the central core than those in suburban areas like Alliance. The flexibility, variety , and spread-out nature of housing options in bordering cities would be an issue. It's entirely possible that a company could build a facility in FW and the closest housing option is in Keller, Haslet, Justin, Roanoke, etc. I don't think any employer would want to be in a position where their employees are being punished for wanting to live as close as possible to their workplace. That being said, I'm all for measures that put these tax abatements in a position to provide maximum benefit for FW. I'm just not sure if this is a way to do it that makes sense.

#17 renamerusk

renamerusk

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 3,678 posts
  • Gender:Male
  • Location:Fort Worth South

Posted 08 July 2015 - 05:55 PM

... It's entirely possible that a company could build a facility in FW and the closest housing option is in Keller, Haslet, Justin, Roanoke, etc. I don't think any employer would want to be in a position where their employees are being punished for wanting to live as close as possible to their workplace. That being said, I'm all for measures that put these tax abatements in a position to provide maximum benefit for FW. I'm just not sure if this is a way to do it that makes sense.

 

If a company builds a facility in Fort Worth without an incentive package, then it is not an issue. 

 

However, there are housing options available in North Fort Worth, so presumably, an employee will not be in the position of being punished for lack of housing, as he or she will have the opportunity to avoid the fee by residing within Fort Worth.

 

Residents of say, Meadowbrook or Ridglea are having their property taxes collected and then transferred to the property tax base of a Keller, Justin, Roanoke, etc.  and who were not asked to contribute to the incentive package. 

 

The employee who is being punished is the worker in Fort Worth who has to contribute for a loss of tax revenue waived for the company and the jobs that are generated.



#18 elpingüino

elpingüino

    Senior Member

  • Members
  • PipPipPipPip
  • 292 posts

Posted 06 August 2015 - 07:47 AM

Interesting report in the Star-Telegram: Fort Worth companies with tax incentives hiring more, spending more

 


 

 


Edited by John T Roberts, 06 August 2015 - 08:33 AM.
Quote deleted because it was directly from a copyrighted article.


#19 johnfwd

johnfwd

    Skyscraper Member

  • Members
  • PipPipPipPipPipPipPip
  • 1,849 posts
  • Gender:Male
  • Location:southwest
  • Interests:Running, bicycling, bowling, nightclub life, science, technology.

Posted 07 April 2016 - 06:49 AM

We're all aware of the on-going policy of the current administration to incentivize developers financially in order to spur commercial and residential growth in a particular area of the city.  The latest to receive this subsidy is the south side.  I applaud this pro-active policy. 

 

The Fort Worth Business article below also highlights some of the projects planned for this side of town, but each of these projects has been the focus of another thread.

 

http://www.fortworth...b576d3cf2e.html

 

Are the TIF's that are aimed at neighborhood revitalization viewed differently from a political perspective than tax abatements targeted to individual businesses of large importance (e.g. GE Locomotive)?






0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users