KENDALLVILLE — There's more work to be done when it comes to updating the city's tax abatement guidelines.
Next month, the city's Economic Development Advisory Committee hopes to host the city council president to hash out their differences and come to an agreeable compromise.
In Monday's meeting at the Kendallville Area Chamber of Commerce, the quorum-less EDAC held a lengthy discussion about the status of its abatement guidelines, which were submitted to the council for consideration last month.
Tax abatements allow a company to phase in the amount of taxes they pay each year on new buildings or new equipment. The first year, they pay no taxes, but in following years the amount phases in by a percentage based on the length of the abatement. For example, with a five-year abatement, the business pays 20 percent in year one, 40 percent in year two, and so on.
Tax abatements generally save companies around half of the taxes they would have otherwise paid during the term.
Here’s what was proposed:
• Three-year abatement — Minimum investment of $100,000, must create at least five new jobs, wages must average $17.50 per hour.
That’s a drop from a previous investment level of $250,000 under the current guidelines, and a hike in the wage numbers from $15 per hour.
• Five-year abatement — Minimum investment of $500,000, must create at least 10 new jobs, wages for all employees must average $17.50, wages for new jobs must be $20 per hour or higher.
The investment total is the same,...
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