City Reviews Tax Abatement Compliance
YOUNGSTOWN, Ohio – The panel that advises the city on the tax abatement agreements it has with businesses recommended continuing those deals as it pursues efforts to help them meet their hiring goals.
The city’s tax incentive review council met Thursday to review the abatements active for the 2011 reporting year. Of the 34 companies the city has tax abatement deals with for that year, most met or exceeded the goals they stated for investment and hiring when they entered into their agreements, said T. Sharon Woodberry, city economic development director.
Four companies -- Allied Consolidated, Domestic Linens, Gold Cross Ambulance and City Printing -- fell short of their hiring goals, she reported.
Some companies far exceeded their stated hiring or investment objectives. Exal Corp., an aluminum container manufacturer that has three abatements, has invested $151 million, far above the $12.635 million it initially committed to. Fireline Inc., which pledged to invest $1.184 million and hire 13 additional full-time employees, invested $4.278 million and added 33 workers.
One issue extensively discussed during the meeting is how to encourage more hiring among Youngstown residents, minorities and women. A report by The Mathis Group, Youngstown, showed that 16 companies receiving abatements had either no city residents, no minorities or no women working for them.
Of the 1360 employees at the 34 companies receiving abatements, only 302, or 22%, were city residents, according to the report. Only 106, or 8%, were minorities, and just 162, or 12%, were women.
Exal lost 13 minority employees in 2011, said Yvonne Mathis, Mathis Group president and CEO.
The city recently engaged with the Business Resource Network, a partnership of area chambers of commerce, workforce and economic development organizations, to put companies to put them in touch with the resources they need to overcome the issues impacting their growth and preventing them from reaching their hiring goals.
The most consistent reason companies cite for falling short of hiring goals is that they are still recovering from the national economic downturn. “We understand that’s bigger than us and that’s something that we hopefully will see improve,” Woodberry said.
Workforce is the second most often cited factor. Companies may skill requirements that are not being met by the existing local labor pool, she added.
One initiative being pursued by an ad hoc committee that includes representatives of companies such as V&M Star and M-7 Technologies is an effort to partner area businesses with the Youngstown City Schools. Under the program, which is still in the discussion stages and which would need to be presented to the city Board of Education, businesses would commit to working with individual schools to show what skills they need for employees and develop curriculums.
Participating in the program would be one way for companies to show “good faith effort” for hiring, Woodberry said.
Copyright 2012 The Business Journal, Youngstown, Ohio.