Industrial Tax Abatements

Two weeks ago I was in Grand Haven, MI (population 11,168) where the local newspaper was reporting upon the work of two college professors whose research showed that tax abatements didn’t work in distressed central cities. Hello! I’m not sure that anything would work in trying to bring industrial jobs back to inner cities. The advantages of the agurbs® are so far superior!

Joy Gaasch sent me an op-ed article that was done by the heads of the five taxing bodies in the county. Joy wrote, “Your presentation in Grand Haven really stimulated the response.” Here is part of their op-ed.

‘Is this fair? Let’s start by examining property taxes paid versus community services received. It is an undisputed fact that commercial and industrial businesses pay more in property taxes than are received in services. This is illustrated by the following graph that shows that for every $1 in property taxes paid, industrial and commercial businesses receive $0.27 in services. In comparison, for every $1 in property taxes received, residential properties receive $1.17 in services.

This is why purely “bedroom” communities have a difficult time prospering and the reason that most cities and townships seek a balanced mix between residential and business uses.

It is also undisputed that industrial jobs create additional employment for the Northwest Ottawa region, every high-wage industrial job creates 2.75 additional jobs. This level of job creation doesn’t occur with retail jobs, professional or office jobs, government jobs, education jobs or health care jobs.

The positive influence of industrial tax abatements in this region of Ottawa County is one of the reasons we are blessed with 169 manufacturers that provide employment to about 16,000 workers. This level of manufacturing is much higher than any other region in Michigan.’