Tuesday, June 11, 2013

City-County Council Approves $30 Million Tax Abatement For Eli Lilly

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The Indianapolis City-County Council last night approved a new $30 million tax abatement for Eli Lilly for a planned expansion of one of its existing manufacturing facilities. Remarkably, Councilor Leroy Robinson, in whose committee the propoosal was heard, had no idea what the size of the tax abatement was when questioned by another councilor about it. He turned to representatives of Eli Lilly to provide the answer. Their representatives pegged the value of the 10-year abatement to be anywhere from $22 to $30 million. The council at the same meeting approved $1.6 million in new budgets cuts across several city agencies, including public safety, as part of its agreement to find $11 million in cuts in this year's budget. The city controller says the city is facing a $55 million budget deficit next year.

The City has provided hundreds of millions of dollars in tax incentives to Lilly in the past. Despite promises of new jobs, Lilly failed to deliver and has shed thousands of jobs from its Indianapolis workforce during the past decade. Representatives of the company conceded the company had reduced its workforce in Indianapolis. When City-County Councilor Brian Mahern, the only council member to oppose the abatement, challenged the request in light of the large tax breaks afforded the company in the past, Lilly lobbyist Mike O'Connor, a former deputy mayor under former Indianapolis Mayor Bart Peterson, a Lilly Vice-President, seemed to make a less than thinly-veiled threat that the manufacturing plant could be located elsewhere if the city didn't approve the tax abatement request. Other council members chided Mahern for his tough questioning of the granting of additional tax incentives to Lilly. Some of these same council members have no qualms, however, about eliminating the homestead property tax credit that provides about $12 million in annual tax relief to homeowners.

In the video above, City-County Councilor William Oliver inappropriately asks the Lilly representatives if he can receive a discount on his prescription drugs if he agreed to vote for the measure. City-County Council President Maggie Lewis quickly cut him off. "You can't do that. No one respond, Lewis said, adding "Maybe off air, Councilor Oliver." Oliver responded, "I don't get no Colts tickets, no Pacers tickets, no nothing? That pretty much sums up the attitude of too many council members. Take care of yourself first. We continuously see the council handing out large tax breaks and public subsidies to private business interests at the same time they are forced to make deep cuts in basic city services. They look at us as if we're to blame because we aren't paying enough in taxes. They can never seem to say no, however, to the people making generous campaign contributions to their campaigns, buying meals for them and giving them free tickets to Colts and Pacers games.


Cato said...

That's some good free market going on there. They got them a regulatory system that keeps competitors out, they get free money from the public coffers, and they pocket the profits.

The "invisible hand," here is merely a first-rate pickpocket.

Oh, and they got Kentucky Avenue, a flippin' major street, outright closed and given to them.

Obama nailed Lilly(s) when he said, more or less, "you didn't make that." No, Lilly(s), you didn't. Nobody will have less ability to gripe about pharmaceutical price controls than Lilly(s).

Paul K. Ogden said...

Who was the genius in the city that told Lilly they could build a building in the middle of Kentucky Avenue? That building killed that road. It used to be a major thoroughfare. Now there are parts of it where you could lay in the road and take a nap during rush hour.

Pete Boggs said...

Good thing the council caved, or Lilly might've ditched its genetics in favor of 100% generics.

Oops.... they're already sailin' away... Arr Indy (R&D)- thar she goes!

CircleCityScribe said...

It appears to me that William Oliver may have committed a felony crime of attempting to solicit a bribe, or official misconduct. I wouldn't trust our (D) prosecutor to handle this one. It's time to appoint a Special Prosecutor!!!

When an elected official (D) is so confident of his corruption that a bribe can be solicited publicly, who should investigate???

"Good Government Hotline 327-2700"

I suggest Joe Hogsett look into this along with a State Special Prosecutor.

Flogger said...

One more example of the Republicrat Party in Marion County in action. No surprise this sailed through. Thanks to Brian Mahern for showing some backbone. I have never been fan of Tax Abatements. Placing this power in the hands of the Government is simply wrong. Either our system of taxes is fair or it is not.

Tax abatements and direct and indirect subsidies such as building stadiums from tax dollars should be illegal. It is IMO is discriminatory.

Indy Rob said...

I would have no problem with the city giving a $30 million tax abatement to Lilly if Lilly were expanding and hiring more people. Instead, Lilly is cutting costs by employing less, and outsourcing the work to external vendors who turn around and offer work at cut-rate wages to some of the former Lilly employees. Meanwhile, Lilly has no new drugs coming to market, and has limited growth prospects. The only thing the $30 million might do is to prevent a hundred or so existing employees from getting laid off this year, but the layoffs are still coming.

I'm just waiting to find out how much in my home's property tax increase is going to be given to that new electric car program. Sounds like the city is already planning on paying for the required parking spaces which it leased out to the bogus parking company. Indianapolis, a city known for taking away from the residents and subsidizing business.

Marycatherine Barton said...

Yes, our busy beloved U.S. Attorney, Joe Hogsett (who could probably easily be elected Mayor of Indianapolis} should closely look into the behavior of our Councilors. I told my brother, Father Mike Barton, visiting from South Sudan, that I would vote for Joe.