Toledo council allows Chrysler 'job creation tax credit'
Proposed property tax break tabled
10/5/2011Chrysler Group LLC chalked up one more tax incentive Tuesday for proposing to add more than 1,100 jobs new jobs at its Toledo Assembly complex, even as city officials withdrew another offer to halve a portion of the company’s property taxes.
Toledo City Council unanimously approved granting Chrysler a “job creation tax credit” that cuts by 40 percent the amount of taxes the automaker would have to pay on any future profits. The credit would stay in effect for 10 years. Councilman Lindsay Webb was absent from the meeting.
At the same time, the Bell administration announced its decision to table a proposed property tax break for the automaker, which would have reduced property taxes on any expanded portion of the Chrysler plant by 50 percent. City officials said they recently realized they could no longer offer the incentive because it would not comply with terms agreed to under a previous property tax break deal.
The automaker has said it wishes to build an $8 million expansion to the part of the Toledo Assembly complex that builds the Jeep Liberty and Dodge Nitro. Chrysler would also install $357 million in new equipment and hire as many as 1,105 additional workers. But the company, Toledo’s largest manufacturing employer, has not confirmed it will proceed with the plan, and state and local officials have been scrambling to provide sufficient encouragement for the automaker to follow through.
“We still don’t know whether they will build the expansion,” deputy mayor Tom Crothers emphasized Tuesday. “We are hopeful they will do so.”
Despite withdrawing the property tax offer, the City could still lose as much as $2.2 million in annual tax revenue paid on the plant. That’s because Chrysler has petitioned the Lucas County Auditor’s office to reduce the taxable value of the Toledo Assembly Complex from $169 million to about $66 million. However, city officials and local school districts reached a tentative agreement with the automaker to cap the reduced value at $125 million for the current tax year and $104 million for the next two years.
In contrast, offering Chrysler the job creation tax credit will not hurt city funds, officials insisted Tuesday.
“They’ll only get the 40 percent break if they turn a profit, which they haven’t done for several years, so that break is not money out of the city’s coffers,” councilman Joe McNamara said.
The city would also enjoy the extra income tax revenue from the jobs created, Mr. Crothers said. More people working would bolster the local economy through spending, he added.
The state, meanwhile, has offered its own incentives to Chrysler, including $10 million in job-creation tax credits and nearly $3 million in grants for job training, machinery, and equipment.
Also Tuesday, City Council postponed a vote on awarding Whitehouse-based company S&L Fertilizer a contract to haul all of the city’s sewage sludge to a disposal facility next to Maumee Bay. The proposed contract has sparked furious debate among councilmen over whether pathogens from the sludge are leaking into the lake. The same fears have also been raised by S&L’s competitor, N-Viro International Corporation.
Councilman D. Michael Collins is pushing for independent testing of the mud within the disposal area, known as “Facility 3,” to determine whether bacteria and algae-causing phosphorus are leaking into the bay.
But councilman Joe McNamara slammed that idea, saying it was a waste of time because the city has already tested water around the facility and found no evidence of leaks from the site. The Ohio Environmental Protection Agency has also inspected the site and found no problems.Council voted 7-4 to return the issue to committee. A new hearing has been scheduled for Oct. 11 at 4 p.m.
Contact Claudia Boyd-Barrett
cbarrett@theblade.com
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