EDITORIAL: Squashing tax credit would hurt New Albany

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February 6, 2010

STAFF REPORTS The News and Tribune Sat Feb 06, 2010, 08:16 PM EST

What works for one may not work for all and New Albany may pay a price for that.

One would think state legislators would have more important issues to deal with during this short session rather than taking relatively minimal tax credits and incentives away from Indiana urban enterprise zones.

But the majority of the State Senate thinks it’s meaningful enough to vote 29-21 in favor of Senate Bill 236, which would freeze the loan interest and investment cost credits offered by UEZ associations for two years. The bill would basically put enterprise zones out of business and it now moves to the House for a vote.

The Loan Interest Credit is the largest funding source the New Albany Urban Enterprise Zone has to offer, and this bill would freeze the credit, which would hinder future growth in the city.

According to some sources in Indianapolis, the bill apparently has the full support of Gov. Mitch Daniels’ office as a way to save the state several million dollars in a time of need. However, we think that’s being shortsighted. These credits are often used to attract new business and New Albany’s zone has played a vital role in the recent revitalization of downtown — including paying for landscaping, facade grants and more.

Another reason this bill is a bad idea, is that other states including Kentucky, Illinois and Michigan have bills pending in their statehouses to amplify tax incentives and credits, according to Michael Ladd, UEZ executive director. With Indiana putting a freeze on tax credits and other incentives, businesses would go elsewhere — to a more user-friendly state.

“If we’re cutting these incentives back and you’re 10 miles away from moving across the border to one of these states, what’s to stop you?” Ladd asked in a recent Tribune article.

Other credits threatened by the bill include: Teacher summer employment compensation credit; maternity home credit; credit for offering health benefit plans and the neighborhood assistance credit, which was instrumental in the rehabilitation of the Cardinal Ritter house in New Albany.

With the state still reeling from the recent recession, and with more than 10 percent of Hoosiers still unemployed, we agree with Ladd and his board that this is no time to take these credits and incentives away from enterprise zones. We should be doing everything in our power to entice businesses to relocate to our cities and towns, instead of giving them incentive to go elsewhere.

Senate Bill 236 has no business being part of Indiana law. Hopefully, the Indiana House of Representatives will see it through to its long-term value and vote no.

YOUR THOUGHTS

To express your opinions on the bill, contact any of the following quickly before the bill comes before the Indiana House for a vote.

Local Legislators

• State Rep. Ed Clere, R-New Albany, 1-800-382-9841, by e-mail at h72@in.gov

• State Rep. Paul Robertson, 1-800-382-9842, by e-mail at h70@in.gov.

• State Sen. Connie Sipes, 1-800-382-9467, by e-mail at s46@ai.org

Sponsors

• Bill co-sponsor Rep. Peggy Welch, R-Bloomington, 317.232.9777, by e-mail at h60@in.gov

• Bill co-sponsor State Rep. Jeff Espich, 800-382-9841, by e-mail at h70@in.gov.

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