Wyoming City Manager's Blog - Tax Abatement Process | News
In the past, the City of Wyoming has provided 100% “PA 328” abatements for companies that are expanding employment and in most cases significantly. Although we do not collect an income tax, the feeling has been that investments in new employment create “spin-off” in our community, for example, stronger property tax collections to support the services the City provides. Similarly, 50% tax abatements provide a benefit to the business in addition to the income from tax dollars that support city services.
We currently provide business incentives equal to about a quarter to a half of mil. In this case, all Wyoming property owners are making up this difference. In addition to these incentives, the Personal Property Tax is in the crosshairs of the Michigan Legislature for elimination. This is clearly a win for business, however would present a revenue loss for the City ofWyoming of about $2.8 million, roughly a mil and one-half. Again, taxpayers will make up this difference either with an increased millage or a loss of service.
This past week the City of Wyoming has had the opportunity to work with a company that has received multiple tax abatements including a 50% property tax exemption on various expansions over the last several years. They are very happy with the City of Wyoming and have successfully navigated through the difficult recession of a couple of years ago. We have just approved their latest tax abatement in the last month. This company is positioning itself to grow both its operation by expanding physical capital, but also by expanding new employment.
When new employment is increased, the City receives a return on the investment that is enough to balance out cost of services like police, fire, roads, streetlights, etc. Without new employment, the taxpayers of Wyoming pick up the tab of the business expansion, this is very similar to the change in the Michigan tax code, as now a tax has been added to retiree’s incomes at the same time the business tax has been reduced.
I am not advocating one way or another in any of these cases, I merely hope to highlight what may on the surface seem to be a simply issue, yet underneath is a complex decision.