Monday, April 13, 2009

North Canton Continues to Gratuitously Provide Tax Abatements to Able Corporations

Prepared Comments Made to
April 13, 2009

My comments tonight deal with an issue I have addressed before to this council and that is the issue of tax abatements and how they are given out simply for the asking in North Canton.

Nearly two years ago, council was considering tax incentives for the construction of a Sherwin Williams Paint Store on Applegrove Street. In remarks to council regarding the tax abatement for Sherwin Williams on May 14, 2007, I said “Tax abatements for businesses in North Canton took on a whole new meaning at last Monday night’s Council of the Whole meeting when Economic Development Committee Chairman Jim Repace brought to the table a request for a CRA Tax Incentive for a Sherwin Williams Paint Store on Applegrove Street, NE.” Continuing, I asked “...[are] the taxpayers of North Canton now expected to subsidize a public corporation, traded on the New York Stock Exchange with sales last year of $7.8 billion with an exemption from property taxes.”

The discussion of tax incentives for the Sherwin Williams Paint Store subsequently ended and the Sherwin Williams Paint Store was later constructed without the need for tax incentives. Imagine that!

On tonight’s agenda, titled as Ordinance No. 33-09, is yet another request for tax incentives for a corporation. This corporation also has sizeable annual sales and financial clout.

And typical of tax abatement requests before North Canton City Council, the legislation is being considered as emergency legislation.

The emergency legislation is for an abatement of taxes under the city’s Community Reinvestment Area Tax program for remodeling and improvements that are planned at the Acme Fresh Market Store located on North Main Street. The store is operated by the Fred W. Albrecht Grocery Company.

The Fred W. Albrecht Grocery Company is a privately owned corporation that has sales in excess of $400 million dollars a year. I am gratified that the Acme Fresh Market store here in North Canton is going to be remodeled and expanded and I look forward to the expanded services that the new Acme will provide to me and the community, but are tax incentives actually needed in this situation?

As I stated in my opening statement, tax abatements are given out simply for the asking in North Canton and they have not been a factor in any of the decisions by businesses who have received them to invest in the city. They have been an afterthought and simply a handout.

In the case of the Fred W. Albrecht Grocery Company, the tax incentives being offered are more than a handout. Last Tuesday, I met with a representative of the Fred W. Albrecht Grocery Company at the company’s headquarters in Akron. In that meeting, the company’s secretary/treasurer told me that Albrecht Grocery Company does not generally ask for tax incentives and in regards to the planned improvements of their Acme store here in North Canton the city simply offered the tax incentives carte blanche, with no questions asked. Sort of like last week’s council meeting when not one single council member posed a single question regarding the request for tax incentives.

The secretary/treasurer for the Albrecht Grocery Company advised me that tax incentives offered to the company have no bearing on plans for the remodeling and improvement being made to the Acme Fresh Market on North Main.

Do I need to refresh everyone’s mind that North Canton is still facing a fiscal crisis? President Revoldt, in Town Hall meetings has indicated that the city could face fiscal emergency and state takeover of the city’s finances. Has anyone forgotten the $1.0 million plus deficit that the city is facing for 2010 and beyond?

And what is truly sad in terms of each and every one of these tax abatements is the fact that the majority of the tax monies that this council is talking of abating are funds destined for the North Canton City Schools.

Is anyone on this council aware of the financial constraints that the North Canton City School District is facing over the next three years?

The North Canton Education Association has just been told the following in a recent meeting of its members: For the school year, 2009-2010, if the district is able to trim this year’s expenditure by $1.5 million, the school district can end the school year with a $2.4 million carryover. For the school year, 2010-2011, the carryover will have dwindled to $660,000. For the school year, 2011-2012, the North Canton School District expects a deficit of $1.7 million.

In last week’s Council of the Whole meeting, Finance Chairman Jon Snyder remarked that the dollar amounts that have been abated in previous tax abatements by council were insignificant. Mr. Snyder, the only thing insignificant about the amounts of those tax abatements is how insignificant the tax incentives were in persuading those businesses to locate and build in North Canton.

The tax abatements given in this city are corporate charity and they take away money from the North Canton City School District and if this council continues to hand them out like party favors you will drive the city’s school district into budget deficits that we now face in the City of North Canton.

Mr. Snyder, an abatement of $6,600 a year on property taxes for a corporation that does $400 million a year in sales is insignificant. It is also tax deductible. Downsizing the City of North Canton and the North Canton City School District is not insignificant.

Last Friday, I delivered a letter to the President of The Fred W. Albrecht Grocery Company, Steve Albrecht, asking him to decline the city’s offer for tax incentives. I am appealing to his moral sense of duty for a community that is in deep financial distress.

Lastly, I must say that I am disheartened that no one in North Canton City Government knows that his fiduciary responsibility is to the citizens and taxpayers of this city first and foremost. Offering tax abatements just because you can clearly is irresponsible.

I am hoping that The Fred W. Albrecht Grocery Company is a good corporate citizen and will be a strong supporter of our community and decline the offer of tax incentives.

The North Canton City Schools need all the money they can collect and most certainly the City of North Canton needs all the revenue it can collect.

Thank you,
Chuck Osborne
City of North Canton