Posted on 02/20/2004 7:49:22 AM PST by TopDog2
TAX BREAKS: NWI lawmakers want big industry accountability
BY BRENDAN O'SHAUGHNESSY
Times Statehouse Bureau Chief
INDIANAPOLIS -- Northwest Indiana lawmakers agreed Thursday on a measure to punish industrial companies who accept tax breaks and respond by sending jobs overseas anyway.
Several lawmakers expressed anger at Ispat Inland Inc. for exporting 20 information technology jobs to India nine months after receiving significant tax relief. The change is intended to send them a message about accountability, they said.
Last May, the General Assembly created a separate tax bracket for integrated steel mills and refineries that local assessors opposed to the plan said would shift $40 million from the three companies to homeowners. At the time, lawmakers said the relief was necessary to save jobs in the struggling industries so they wouldn't direct investment to other, less-taxed facilities.
Now, an amendment to Senate Bill 274 proposes to rescind the benefit of last year's helping hand if the company "displaces jobs involving production or manufacturing."
State Rep. Chet Dobis, D-Merrillville, who leads the region's delegation, said the bill was aimed directly at Ispat for outsourcing jobs.
"We went out of our way to make sure the industries that are eligible got tax breaks with the express purpose of retaining high-quality jobs," Dobis said. "We're sending them a message -- don't even think about it."
At the request of some Lake County industrial giants, the General Assembly last year passed House Bill 1858, which lowered from 30 percent to 10 percent the floor on how far certain business could depreciate their assets. Local tax assessors recently have discovered the companies' taxes decreased more than originally estimated, affecting the tax burden that other businesses and homeowners take on.
U.S. Steel Co., Ispat Inland Inc. and BP Amoco are the three companies that qualify for the special tax bracket targeted to oil refineries and integrated steel mills. In exchange, they agreed to drop court cases in which they refused to pay taxes since 2001 on their personal property.
The companies said a tax shift already occurred, so the bill would help the counties collect more than they are now. John Dull, attorney for the Lake County Commission, said that may be true of U.S. Steel Corp. in Calumet Township, but it's not certain in North Township.
Dull said the change backs up arguments that local politicians made last year about how the bill did not make the beneficiaries accountable. He said both the incentive of lower taxes and the threat of losing that carrot should be extended to all businesses in the state as a way to develop the economy.
"It seems valid," Dull said. "If you make a commitment here, we'll help you. If not, we won't. Companies that export job shouldn't have a tax benefit."
Brian Popp, a Merrillville tax attorney who opposed the bill, said it will be difficult to penalize companies that can shift jobs and production in many ways. He questioned how displacing jobs would be defined and monitored.
"These are Band-Aids," Popp said. "Again, they're operating in a vacuum downstate."
State Rep. John Aguilera, D-East Chicago, the author of the amendment, said he plans to introduce it Monday. He said the delegation agreed on a version that would take effect immediately, forcing companies to evaluate whether to export jobs or forfeit this year's tax relief.
"There's no question these industries are fighting for their lives, but you can't have your cake and eat it, too," Aguilera said.
Brendan O'Shaughnessy can be reached at boshaughnessy@nwitimes.com or (317) 637-9078.
Let's be careful over there.
It should be noted that Indiana is a solid "red" state...
It may get the attention of capitol hill, but not at the white house, where the attitude seems to be "you got no one else to vote for."
And "Shut up before I give you the back of my hand again."
LOL!
Who is Exporting jobs? What will Jim Robinson do to protect me?
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