Tuesday, May 16, 2006

Toledo and the State breathe a sigh of relief....

Yet questions remain on the whole issue of tax abatements. From the Cleveland Plain Dealer article as linked above:

Toledo resident Charlotte Cuno and others contended that the tax break interfered with interstate commerce because it gave Ohio an unfair advantage over other states. Ohio argued that other states had their own tax incentives, but the 6th U.S. Circuit Court of Appeals in 2004 ruled in Cuno's favor.

The Supreme Court, however, decided the case on a much narrower basis. It ruled that Cuno lacked legal standing, or the right to bring the case, because she and other plaintiffs were not directly affected by Ohio's tax decision. The federal courts were never intended to be "virtually continuing monitors of the wisdom and soundness of state fiscal administration," Roberts wrote.

I do have to agree with that last statement, we the voters are supposed to be the monitors of the wisdom and soundness of fiscal administration locally and on a state basis. Either by ballot or by encouraging legislation.

Abatements seem to have become a poker chip in the never ending how much can we give you that another location won't or can't. Sometimes I think they do have a positive outcome, so I'm not anti-abatement but I do think that they should only be offered when it is demonstrates there is a large scale benefit to all from an abatement rather than millions in abatements that will only benefit a limited number.

UPDATE: With a curtsy to Roland at his blog Roland's Ramblings here is the Link to the pdf of the decision for those of you who are interested in reading it.

6 comments:

Anonymous said...

How about a more level playing field for all local and state governments by eliminating all coporate and business tax abatements? Aren't those abatements just another form of corporate welfare, anyway?

Unknown said...

That is another side issue to abatements, it does pit the larger cities that can offer more in financial incentives against the smaller ones who can't.

Especially if the competition is within a close geographic area. Then of course the added benefit to the business that receives the abatement over the ones who do not, which does especially harm smaller businesses that are not going to be considered for abatements.

It's why I said I'm not anti-abatement but I think they should be carefully evaluated especially as to the overall benefit before they are used.

historymike said...

Agreed, Roland. 110%.

Until we abolish all corporate abatements, we will continue to see the tax base eroded and pushed off onto the backs of workers, small businesses, and homeowners.

This has to be accomplished at a federal level, and done in such a way as to avoid getting the legislation overturned by the interstate commerce clause.

The last time I checked, the US Constitution began with: "We the People, in order to form a more perfect Union..." and not "We the Corporations, in order to form a more perfect Union..."

This seesaw competition between states for a limited number of American industrial and commercial facilites is senseless. It is tough enough to compete in a global marketplace with low-wage countries like China without having to see neighbor states trying to cannibalize each others' industrial bases.

And remeber - the real "competition" for the Jeep plant was Monroe county, twenty miles north.

liberal_dem said...

Common Dreams has an article by David Sirota:"Supreme Court Officially Emasculates Taxpayers" which does not look so gleefully at the SCOTUS decision.

http://www.commondreams.org

Hooda Thunkit (Dave Zawodny) said...

Granting abatements to lure corporations is, inherently EVIL.

IMO, if they won't come based on the area's merits alone then maybe the area would be further ahead without them.

Abatements, if given should bring significantly more financial benefits than they cost a community, to be worthwhile, which they rarely are.

Calling it corporate welfare is being polite; I call it extortion, pure and simple.

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