Date: Fri 19-Dec-1997

Publication: Bee

Author: STEVEB

Quick Words:

business-Neumade-Rosenthal

Full Text:

Rosenthal Wants To Know: What Tax Breaks Were Offered To Neumade?

BY STEVE BIGHAM

Neumade Products, which recently moved into Newtown, is hoping to become the

first company in town to receive a tax break under a new tax-incentive plan.

During informal discussions, town officials told the company that some tax

breaks would likely be offered, but did they make any promises? That is what

First Selectman Herb Rosenthal is trying to find out. Mr Rosenthal has made it

clear he is against tax deferrals, saying they do not necessarily bolster a

town's tax base.

"I only found out about this supposed offer after the election," Mr Rosenthal

said at Wednesday's Legislative Council meeting. "In February, the Board of

Selectmen approved certain tax breaks. I tried to call [Neumade Products

owner] Ronald Jones to find out what promises were made."

According to Community Development Director Elizabeth Stocker, no tax-break

promises were ever made to the Pecks Lane company.

"You don't make promises. Neither myself nor the first selectman is in a

position to give promises," Mrs Stocker said. "As far as expectations go, I

can't answer that. You'd have to speak with Mr Jones."

The Neumade Products owner was unavailable for comment this week.

The Legislative Council must now decide whether or not to give Neumade

Products what would amount to a five-year tax break. A `no' vote may look like

the town is going back on its word, the first selectman said.

The Economic Development Commission (EDC) created the tax incentive program

last year in its effort to lure light industry into the town. The program uses

a formula to give selected industries tax breaks for the first few years as an

incentive for locating or expanding their facilities within the borders of

Newtown. Members of the EDC presented the tax deferral program to the council

last year but never returned after members asked them to refine certain

sections of the proposal. Instead, the EDC went to the Board of Selectmen,

which passed a tax-break resolution two months later.

There are some on the council, including John Kortze, finance committee

chairman, who agree with the first selectman.

"People think there's merit in tax deferrals, but it creates concerns because

the town loses revenue," Mr Kortze said.

The finance chair said a new company creates jobs and brings customers into

the business community. However, there's also a double whammy, he said.

"You lose the tax revenue, and these new companies create the need for

services," he said. "I think we'd be doing the town a drastic disservice if we

did not look into this."

Neumade Products reportedly has requested a 100 percent tax break for the

first five years. The company is already receiving state aid in the form of

building loans, Mr Kortze said.

Neumade Products makes sheet metal cabinetry for the TV and movie industry.