Tax Abatements: The breaks show city's support 2014.02.26

Tax abatements for industry have become standard practice in cities across the country. A community that doesn’t give tax breaks is likely to be a community without much industry.

It’s still a bitter pill to swallow for many residents. They know a tax break means less revenue to pay for the services they enjoy. But on the other hand, a tax break also helps support local industry and it always comes with the promise of some job growth.

At Monday’s city council meeting in Morenci, a citizen pointed out a fact of tax abatements that is easily overlooked. The obvious consideration is to determine how much revenue is being given away. How much will the city lose when an abatement is given?

It’s true that a loss will occur, but that’s only half of the story because a standard abatement, such as the one granted Monday to Morenci’s General Broach Company, covers only half of the increase in tax revenue. If General Broach is expected to save $11,600, the city will also gain that much from the company’s new investment.

Council member Brenda Spiess stated that it’s much more difficult to attract new business to town that it is to retain the existing industry. It’s easy for her to vote “yes” on an abatement request and council has no trouble following that approach, as well.