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Fairmont should assist business expansion plan

September 20, 2012
Gary Andersen, Lee Smith , Fairmont Sentinel

We anticipate the Fairmont City Council is going to approve a tax-increment financing plan for Kahler Automation. The incentive package would save the business $26,000 per year for eight years. We believe the plan is a good one, allowing Kahler to expand its existing facility by 15,000 square feet and add jobs.

Tax-increment financing is an easy and good idea. Businesses pay property taxes, so when they expand, their tax bill goes up. Under tax-increment financing, the bump in taxation does not go to local government coffers, but instead is used to help get the project off the ground. When the TIF district expires in a given number of years - eight in this case - the tax dollars again flow to the city, county and local school district.

The idea is to help foster economic development and job creation, which is good for the whole town.

On the flip side, critics suggest tax-increment financing robs government of needed revenue. They say presumably profitable businesses can expand on their own, and pay their property taxes like everybody else. After all, homeowners, for instance, don't get a property tax break when they put on a new roof or build a three-season porch.

The city is obviously making a calculated tradeoff. It is weighing a greater good in specific cases of business tax breaks. Can that be a tricky pursuit? Sure. But until there are vast reforms in the overall tax system, cities should continue to help foster business openings and expansions. More business activity and more jobs are good things.



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