Fort Wayne Tax Abatements

Tax abatements have been a common topic on this blog. They are a good example of what is wrong with our Government. Tax abatements allow companies to have a portion of their taxes on new equipment and property forgiven over a 10 year time period.

When tax abatements were first used they were very controversial and used very rarely. They were used on projects that would CREATE new jobs with wages that were significantly higher than the norm. Now tax abatements are granted for ANYTHING.

I pretty much oppose all tax abatements; however, an argument can be made for tax abatements that meet the following basic criteria:

Actually create new jobs that did not exist before WITHOUT causing the loss of already existing jobs that currently exist.
Create new jobs that pay significantly better than the local median wage.
The tax abatements are then tied to actual performance and the company only gets the tax abatements if it proves that it actually created and maintains the new jobs it promised in its application.

One of the major problems with tax abatements is they only are granted for medium to large sized projects. That is because the approval process takes time and time is money. Also the annual filing of personal property tax returns takes time and money; heck I prepare quite a few of these for my clients each and every year.

My firm handles well over two hundred small local businesses. Not one of them have applied for or received a tax abatement that I can think of off the top of my head. Our firms clients employ about a thousand people locally. Our clients tend to be small and really do not qualify for tax abatements…

I would be far happier if tax abatements were abolished entirely and the tax rates that all business owners paid were lowered. This would prevent the favoritism that tax abatements foster. This would also allow us to eliminate some government employees and would be a far more fair system.

The Journal Gazette has a disturbing story that you should read. Per the story a firm is planning a 5.3 million dollar expansion that will create no new jobs. Zip. Zero. Nada. None. Per the story the tax abatement would cause the company to pay $483,252 less in taxes than they would otherwise pay.

You cannot make this stuff up and it shows how absurd the local tax abatement system really is.

Consider that our local tax abatement system is so bad that tax abatements are now granted to firms that create no new jobs, create a single part time job, create jobs that pay minimum wage, etc.

I wonder if this abatement will pass with another 9-0 vote of our supposedly Republican City Council?

Good Grief…

Mike Sylvester

Paula Hughes and the Wheel tax

Based on a disagreement John Kalb and are are having about Paula Hughes and her position on the wheel tax I thought I would post a summary of what I think happened in regards to the Wheel Tax. This all happened a couple of years ago and after some research here is what I think happened:

While Paula Hughes was a member of our County Government:

Allen County decided to stop maintaining the Bridges in Allen County as a way to save some money.
Allen County Government (Paula Hughes herself) went to the Fort Wayne City Council and asked the Fort Wayne City Council to agree to allow Allen County to keep 65% of the revenue generated by the increase in the wheel tax. Fort Wayne would keep the remaining 35%.
The Republican Fort Wayne City Council and the Democratic Mayor agreed to allow 65% of the additional revenue to go to the County.
The Republican Allen County Council in a 4:3 vote then agreed to raise the wheel tax. They likely would NOT have agreed to raise the wheel tax if the County would not have gotten the increased revenue in order to maintain the bridges.
Paula Hughes voted AGAINST raising the wheel tax in this 4:3 vote.

So Paula Hughes is now trying to convince the voters that Mayor Tom Henry championed the increase in the wheel tax?

Seriously?

What really happened is the County needed to save money and so they decided to stop maintaining the bridges UNLESS the City of Fort Wayne agreed to raise the wheel tax and in turn promise the County that the County would get 65% of the increased revenues.

In other words the Republican County Council wanted to raise taxes to meet their budget shortfall.

Paula Hughes was in the middle of this and she specifically told Mitch Harper, on video, that the County wanted to City to promise a large portion of the increased revenues to the County if the County in fact did raise the wheel tax.

In truth when it came up to a vote on County Council Paula Hughes did vote against the increase in the wheel tax.

So she asked the City to raise it and promise the County 65% of the increased revenue. Then after the City did this she voted against the bill to increase the wheel tax.

The position of Paula Hughes on this matter is CONFUSED to say the least.

Now the State Republican Party sent out a direct mail piece stating that:

“Paula Hughes said NO to Tom Henry and the massive Wheel tax scheme in 2009.”

The only reason the wheel tax was increased is because the Republican County Council voted to increase the wheel tax.

John if any of my facts are wrong in this post please let me know… I do not understand your thinking on this at all!

Mike

Paula Hughes, does she think we are all stupid?

The Fort Wayne Mayor’s race has been difficult to watch. On one side we have Democrat Tom Henry. Mayor Henry and his Administration have done a mediocre job. Not a lot of good things; not a lot of bad things. I have always thought of Mayor Henry as a placeholder of sorts. That being said I think he is a good man and I think his heart is in the right place…

Then there is Republican Paula Hughes. She seems almost desperate to win and in my opinion her campaign has been both negative and at times somewhat dishonest.

I am relatively sure at this point that I will either not vote for Mayor or vote for Democrat Tom Henry. Today I am leaning towards voting for Mayor Tom Henry.

I think what has pushed me over the edge is the last mailer I got from the Indiana State Republican Committee. I just do not care for mailers like this. This mailer does not have all of its facts straight. Interestingly enough the mailer quotes its sources…

So here are the four things the mailer says about Tom Henry; my comments are in bold:

“Tom Henry is taking the largest salary of any Mayor in Indiana.” This is true and as such is a legitimate point.
“He has spent over $14 million of our tax dollars to get himself a fancy new office.” I am against Citizens Square and I think this comment is fair.
“He has spent our City into over half a billion in debt.” I do not think this comment is fair. The City of Fort Wayne DOES have too much debt and Tom Henry is responsible for part of it; however, he inherited much of it.
“Now he’s running a NASTY CAMPAIGN against Paula Hughes.” It is true that Mayor Tom Henry has spent done some negative campaigning of his own; however, this comment is absurd since the Paula Hughes Campaign has been FAR MORE negative.

Then the advertisement tells us good things about Paula Hughes:

“Paula Hughes has a proven record of protecting taxpayers.” When I look at Paula Hughes and her past stances I see another big Government Republican who supports wasteful downtown spending and who supported the ABSURD Maplecrest Extension Project and who asked City Council to raise the Wheel tax.
“Paula Hughes LOWERED the proposed tax levy in the 2007 budget.” The 2007 property tax levy actually increased by 1.7 million. It COULD have been increased by 1.8 million.
“Paula Hughes said NO to Tom Henry and the massive Wheel tax scheme in 2009.” We have covered this issue on this blog multiple times since 2009. THIS STATEMENT IS AN OUTRIGHT LIE. THERE IS VIDEO ON THIS BLOG SHOWING HER ASKING CITY COUNCIL TO APPROVE THE TAX INCREASE.
“Paula Hughes proposed a property tax REBATE in 2010.” This one is true…

I will NOT be voting for Paula Hughes next month unless something shocking happens.

If you support Paula Hughes please tell me why you support her?

Mike

Mayor Tom Henry

In just a few weeks Fort Wayne will determine who will be its Mayor for the next four years.

If you are planning to vote for Mayor Tom Henry please tell us why you will vote for Tom Henry.

Mike

President Obama and his American Jobs Act

This is an update to a previous post.

Over five weeks ago President Obama unveiled a stimulus plan that was a combination of short term spending increases, tax cuts, and long term spending decreases that may or may not ever happen.

President Obama’s plan is large and unwieldy. His plan certainly does not have the support of the Republican Party in its current form due to the many large tax increases. His plan does not have support from the Democratic Party either.

The truth of the matter is this American Jobs Plan is his re-election strategy. He expects it not to pass and he expects to be able to blame the Republicans for ensuring it does not pass.

I think President Obama has miscalculated this rather badly. I think he miscalculated because he “assumed” the Democratic Party would automatically support his plan.

Harry Reid is the number one Senate Democrat and leads the Democratic Senate. He still has not even scheduled a vote. Further Dick Durbin, the number two Democrat in the Senate has stated that he does not think the bill can pass the Democratically controlled Senate…

President Obama does not even understand his own political party and it is very hard to watch him stumble so often…

The American Jobs Act was dead the minute President Obama announced it. That being said President Obama is running around the country trying to drum up support with the public. He would be far better served by talking the Democrats in Congress and trying to ensure he has enough votes to avoid another embarassing legislative defeat for President Obama.

Mike Sylvester