Tax abatements have been a bit of a hot topic at St. Joseph City Commission meetings in the past few months, with some commissioners expressing concern about whether offering such incentives for companies to expand or locate here is a good long-term move. To explain it further, the city brought in Cornerstone Alliance president and CEO Rob Cleveland for a lesson. Commissioners said they understand the pros, but wanted his take on the cons of incentives.
“In my opinion, the only negative that can come from it is a perception that you’ll just always grant them,” Cleveland said, adding “that’s why we don’t ever take them for granted.”
Cleveland added there is pressure on local governments all over the state.
“These companies have a real chance to go somewhere else.”
He also broke down the numbers comparing Michigan and Indiana, noting that the Hoosier state puts limits on the tax rates for companies. Cleveland said local governments in Michigan can levy different millage rates, which helps, while Indiana communities are hampered by not being allowed to go over 3%. He added tax breaks have taken a black eye in the public image with what happened with Amazon’s HQ2, as communities competed by offering up huge tax breaks while the company had already decided where it would expand ahead of time.