To abate or not to abate, that is the debate.
Sorry, I couldn't resist.
This week Alpena Municipal Council received the report card on companies that received major tax abatements in 2011, and of the five, there were three "A's," one "B" and one "F" regarding the fulfillment of the terms of the abatement.
Panel Processing, Conveyor Systems Inc. and Alro Steel Corp. all received top marks. Lafarge Corp. just missed receiving a top grade, while ATI Casting Service received the failing grade. ATI, because of the economy, never got production going and has since closed the facility.
"This is a snapshot on how the companies are doing on their responsibilities and I know how hard the four of them are trying," Councilman Sam Eiler said. "I'm proud of the three that exceeded and I'm sure Lafarge is doing everything it can, plus Lafarge's contributions to the community are exceptional."
So, did taxpayers benefit from the tax abatements, or ultimately, were the abatements a bad business practice of previous councils and officials?
I would argue taxpayers did fine by the abatements as for the most part, the investments the companies promised has been exceeded, jobs have been preserved or expanded and the companies, with the exception of ATI, survived a very rough recession.
Tax abatements are an important tool in an economic developer's toolbelt, and while they alone might not be the key needed to attract a new business or preserve an existing one in a community, without them they place a developer at a huge disadvantage.
Who knows had the abatement not been available, what would have happened with each of the five?
Personally, I'm glad that is a question we need not concern ourselves with. If abatements help spur job preservation and expansion, then I'm a supporter. When you consider that the people who are filling these jobs need homes to live in, groceries, clothing and appliances, then it is much easier to visualize the economic benefits for the community as a result of the abatements. One easily can picture how the dollars created from that company's payroll spin into other dollars of opportunity around the community, from barber shops to gasoline stations.
"I think for the most part it was a positive report," Mayor Matt Waligora said. "From here on out I think we have to look at each request on a case-to-case basis, though, and have to be sure it is a win, win for both. We have to approve or deny on individual facts and possibly make the duration of the agreements shorter. If used correctly, though, the abatement is still a good tool to have to spur growth."
The report provided important information and feedback to council, and the community.
It was the type of accounting that provided an accurate picture of economic assistance and its impact on the community. It was useful information that enlightened all of us.