Ballard Administration Continues To Bleed Taxing Districts With Abatements

Nearly a decade ago, the City of Indianapolis awarded Navistar a tax abatement deal that saved the company $18 million with a promise of retaining 1,800 jobs at its Indianapolis foundry. Instead, it began shutting down the facility a few years ago, failing to meet the promises it made. The Ballard administration clawed back only $5 million of the tax abatements the company took, but the City retained all of those funds for use on its own economic development activities despite the fact that all taxing districts contributed towards the abated taxes--nearly half of which would have gone to the school district. You may recall the Ballard administration gave that $5 million to the ICVA and the City's economic development corporation.

The company is back again with its hand out and the City is approving yet more give-aways to the company after it recalled a very small workforce. Yes, for creating a measly 250 jobs, the company will get millions more in tax abatements even though it defrauded the taxpayers out of tens of millions of tax dollars by failing to meet its earlier job promises. The IBJ's Scott Olson explains the insanity of the Ballard administration's taxing policies:

The company received $18 million in tax breaks from the city in the past decade, but agreed to repay $5 million in early 2010 for failing to retain more than 1,800 jobs at the plant. The huge east-side facility employed as many as 1,650 workers in 2005, but began mass layoffs amid the recession as the auto market tanked.

Still, the city is set to preliminarily approve another tax abatement because Navistar acted in “good faith” when recognizing that it fell short of meeting job commitments, said John Bartholomew, spokesman for the city’s Department of Metropolitan Development.

The Metropolitan Development Commission approved Navistar’s abatement request at its Wednesday meeting. Final approval could be granted July 20.

“They weren’t trying to fight us; that worked in their favor, so they’ve got a clean slate now,” Bartholomew said of Navistar. “This hopefully will prevent a huge industrial site from going off the tax rolls. This is a great opportunity to bring in new jobs.”

Joanne Sanders, Democrat minority leader of the City-County Council, said she is pleased the city is helping to save jobs but thinks it should have collected more from Navistar for failing to meet the requirements of the first tax abatement.

"To say they are starting with a clean slate is disingenuous," she said. The real clawback would have been close to $20 million."

Navistar has recalled 150 workers who were laid off when Indianapolis Casting Corp. stopped production in late 2010. Long-term plans include hiring 100 more employees by 2013 and investing $19 million in technology and supporting equipment.

Not surprisingly, the workers at the facility had to agree to a wage cut simply to breathe new life into the facility. I don't know who is suppose to be representing the interests of the schools and other taxing districts that are adversely impacted by the City's insane economic development policies, but clearly nobody is sitting at the table representing either the taxpayers or the other affected taxing districts. These idiot decision-makers at the City continuously make decisions that permanently erode the other taxing districts' tax bases and the only entity that ever receives any benefit from them is the City--because it establishes TIF districts in these areas that capture all of any new tax revenues generated within these areas after the abatements go away. These other taxing districts have no room to complain, particularly the schools, when they sit idly by and allow this to occur without objection.

UPDATE: Pat Andrews has uncovered the fact that the MDC also just reactivated two dormant TIF districts, the Dow Elanco TIF at 86th & Zionsville Road and the Naval Air Warfare Center in Warren Township.