Tax rebates mulled

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December 4, 2013 - 12:00 AM

A specific request from a local business has blossomed into a full-blown discussion regarding Allen County’s tax exemption program through the neighborhood revitalization program.
Dating back several months, Bob Shaughnessy requested tax abatements for his son’s business, Sam & Louie’s (Shaughnessy is the contractor, not the owner). The business is near completion, located on North State Street, next to Walmart.
The neighborhood revitalization plan requires that a business be in a “blighted” area to be included; the restaurant is not. An exemption would be needed to include it into the plan. “Blighted” is a term left to be determined by the governing bodies, Commissioner Dick Works said, and is subjective.
The program provides a 100 percent ad valorem abatement for six years (minus a 5 percent administrative fee), then it is reduced by 20 percent each year for the remaining four years. Works pointed out that taxes must be paid first, then are rebated by the governing bodies.
For complete exemption from property taxes, a business needs approval from the City of Iola, Allen County Commissioners, USD 257 and Allen Community College. At the Nov. 11 Iola City Council meeting, members voted to approve the expansion of the blighted area to include all of the city of Iola — for their portion of the taxes, not including the other three entities.
Iola Administrator Carl Slaugh said the council decided to expand the designated area, mainly because the exemptions being granted by the council were numerous and one area of town would not be favored over another.
Slaugh said the thinking by Iola City Council was, “If we are going to go ahead and grant everyone exemptions, we might as well change the policy,” Slaugh said.
Now, for full exemption, an “interlocal agreement” between the four entities must be signed for Iola to be completely encompassed in the neighborhood revitalization plan.
This is where the discussion begins.

SHAUGHNESSY came before the commissioners Tuesday morning to ask for a second look at his request, now that the city has expanded the zone. His first request was denied by the commissioners, because they did not want any exception to be made.
“You can’t just set down a neighborhood revitalization plan and except your way out of it,” County Counselor Alan Weber said during the meeting. “Granting exceptions is what I take exception to.”
In order to avoid making exceptions, Weber said municipalities and counties across the state are expanding the blighted zones to make the program more accessible.
“Everybody is doing it, entire counties are doing it,” he said.
“I think they are trying to circumvent the intent of the law,” Works said of the program, particularly picking and choosing specific businesses to include into the area.
Shaughnessy, who received approval from each entity except for the county, said the program is the result of high taxes forced upon businesses. Shaughnessy said he would do whatever it takes to encourage small business owners to come to the community.
“The county is going to benefit from it and the city of Iola is going to benefit from it,” Shaughnessy said. “If we don’t have our kids come back and invest in our town, we’re in trouble.”
He said taxes can make quite an impact on a business’ start-up costs, and any breaks they can receive may make or break their success.
“I’m out there, banging my head against the wall trying to save every penny (in the construction),” he said. He pointed out that he would not benefit from the abatement, his son Toby would save on the costs.
Works said the commission still has much to discuss.
City of Iola officials are slated to more fully explain their position at next week’s county commission meeting.
According to County Clerk Sherrie Riebel, the amount rebated to businesses in 2012 was $43,000 from Allen County, and $122,000 from all four entities together.

IN OTHER BUSINESS:
— Commissioners approved a reduction of the speed limit on 1400 Street in Humboldt from 45 to 35 miles per hour. 1400 Street is east of Humboldt in front of the new USD 258 sports complex.
— The latest version of the EMS merger between the City of Iola and Allen County Commissioners was signed, including the rental agreement for $250 per month of the EMS building on North State Street.

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