City leaders getting aggressive about recouping tax breaks

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis is joining scores of cities across the nation that are starting to crack down on companies that promise jobs in return for tax breaks but fail to deliver.

Mayor Greg Ballard said Wednesday during his State of the City address that the city has received $5 million from Illinois-based Navistar International Corp. and expects to collect $500,000 more from other companies that also failed to meet job-creation requirements.

“It is no secret how tight our city budget is,” Ballard said.

Indeed, as the recession drags on, more municipalities struggling to fix roads, fund schools and pay bills increasingly are rescinding tax abatements to companies that don’t hire enough workers.

The shift is quite a change for cities and towns that often bend over backward to lure jobs by offering abatements and other incentives. Washington, D.C.-based economic development watchdog group Good Jobs First estimated companies in the United States spend $60 billion annually to entice prospects.

“We want to be partners with these companies and incentivize them to locate in Marion County,” City-County Council President Ryan Vaughn said. “But at the same time, we will hold them to their commitments when they come here.”

Ballard is proposing the money expected to be collected from so-called “clawback” provisions help fund economic development, convention, tourism and education efforts.

Pending Council approval, Indianapolis Economic Development Inc. will receive $3.5 million from the latest rescissions, with $2 million to invest in properties ripe for redevelopment and $1.5 million to bolster marketing initiatives.

Indianapolis Economic Development operates on a $1.1 million annual budget and receives funding from the city as well as from private sources.

The Indianapolis Convention & Visitors Association is set to receive $1.5 million, which will help it hire four additional salespeople and market Indianapolis to more cities.

One of the new hires would be located in Washington, D.C., bringing the sales staff there to four. Walsh said it is important to have a presence in the nation’s capital, given that 13,000 national associations are headquartered in the area.

The ICVA also is revamping its Web site and will unveil the new version April 1.

In addition, the mayor will seek $175,000 to transform the city’s charter schools initiative into an Office of Education Innovation. The endeavor would include restructuring the charter schools office to also serve as a county-wide hub for education initiatives and data-sharing, Ballard said.
Joanne Sanders, Council Democrat minority leader, expressed a few reservations about the mayor’s plans to spend the clawback funds.

“I know the money is going into economic development, and I certainly support that,” she said. “But I would like to see some of the money go back to the neighborhoods for infrastructure improvements.”

Navistar will pay back part of its abatement after failing to retain more than 1,800 jobs it had promised. The company, which had received $18 million in tax breaks during the past decade, announced early last year that it would close its east-side diesel engine plant.

Sanders said the city should have been more aggressive in negotiating with Navistar to collect a larger chunk of the $18 million in tax breaks it received.

Associated Press contributed to this report.



  • Eli Lilly Owes $214 Million?
    City & State Give $214 Million of Taxpayer Incentives to Eli Lilly for $1 Billion, 7,500-Job Deal

    The $214 million in incentives over 10 years is split almost evenly between the state and the city of Indianapolis. The state pledged $108 million, while the city pledged $106 million.

  • Mayor
    Yes Yes Yes..I have been alife time democrate,I now belong to the open feild, the place where public dwell.The public People Party.With Senator Evan "3way"Bayh to one side, Out ethics/out personal integrity,lack of commitment,secreacy in battle.Master at the emotion of ommition and the mayor the other. After all has been said and, the smoke and smell, starts to clear.I think i know who your next sentor should be.The man standing ,is a man that cause action,takes control,leads.He is not a last minute finger pointer.But a man of action.I follow you sir. Thank you for leading,your sense of duty,and no none sense approach to leardership.Brings hope where there is none. Not sense the great leadership of His Honor Mayor Hugnut,has we been blessed.Thank you for being here for me and my large family of us all.Your devoted freind. Don Harris President of the www.PublicParty.info
  • How Much Does Eli Lilly Owe?
    Wonder how aggressively the city is pursuing the tens of millions Eli Lilly owes taxpayers for not fulfilling its promises of over a $1 Billion capital investments and jobs.

    Suspect they will collect nothing.

    Mayor Ballard's father worked for company.

    Governor Daniels was the Lilly executive who negotiated the incentive package with city and state.

    Former Mayor Bart Peterson who gave the local taxpayer incentives is now a Eli Lilly executive.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

  2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

  3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

  4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

  5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.