Elected leaders in Sunflower County could be playing a dangerous game when it comes to its policies on tax incentives for new and existing businesses. (News article appears on page 20).
While there exist some who oppose the use of tax incentives to promote economic development, these abatements are an unfortunate reality when it comes to recruiting businesses and keeping existing industry happy.
Just in the last month, the City of Indianola and Sunflower County agreed on two separate tax abatement packages, one for SuperValu and the other for a project being developed by Sam Rosenthal on U.S. 82.
After the city held a special meeting and granted Rosenthal the best tax abatement the law allows, the project hit a snag when it came before the Sunflower County Board of Supervisors.
That board became concerned with whether or not the city was using a fair process to dole out tax incentives, which led them to place a moratorium on granting tax abatements.
This all stems from an ongoing issue between an existing business that has been denied a tax abatement for a recent expansion project and the city.
Indianola’s Platinum Plus Care conducted a major expansion, but according to Mayor Steve Rosenthal, it failed to request tax incentives prior to the project being completed.
Rosenthal says state law prohibits the granting of tax abatements if they are requested after a project starts or is completed.
He also says then State Auditor Stacey Pickering’s office agreed that Platinum Plus was not eligible.
When Rosenthal explained this to the county board, they immediately lifted the moratorium on tax incentives.
Board President Glenn Donald made clear that putting such moratoriums in place could hurt business recruitment to the area, and he is correct.
The battle between Platinum Plus and the city continued during Monday night’s meeting of the board of aldermen.
This time, members of the board made a short-lived attempt to rescind the tax abatement it unanimously granted Sam Rosenthal just a few weeks ago.
Board Attorney Gary Austin informed them that such a vote would violate Rosenthal’s right to due process.
I sincerely hope that the city is able to get with Platinum Plus and work something out. They are, after all, an existing and viable business within the city, and if they are expanding and hiring more people, the city should do everything in its power to encourage that.
City leaders should not drag a previous economic development project into the middle of their political battles.
This will only hurt business recruitment.
Businesses are often lured to communities because of good development sites, solid existing buildings, a teachable labor force and other factors.
Tax incentives are typically used to close those deals, meaning that if Indianola is on the short list of landing spots for a company, we are pretty much equal with the other communities when it comes to land, labor and so forth.
What separates the winner from the pack is the tax incentive package the community, and sometimes the state, is willing to pony up to land the company.
Tax incentives typically close deals for companies.
If Indianola and Sunflower County start to get the reputation as a community that is hostile toward tax abatements or is even willing to rescind previously awarded tax abatements because of petty political fights, don’t think for one second competing economic developers will not leverage that against us when they are trying to convince a company to go with them and not us.
Existing businesses should be given every opportunity under the law to benefit from tax abatements that are available, but city and county leaders need to be mindful of the consequences of playing games with these incentives.
