Date: Fri 30-Jan-1998

Publication: Bee

Author: CURT

Quick Words:

edink-tax-incentives-Neumade

Full Text:

Ed Ink: End The Confusion On Tax Incentives

One of Newtown's initial attempts at luring desirable industry to town appears

to have been fraught with confusion and misunderstanding, and now the town is

trying to decide whether to live up to an agreement with a business owner that

it believes it never made.

Ronald Jones, of Neumade Products of Peck's Lane, went before the finance

committee of the Legislative Council this week saying he was promised tax

breaks amounting to more than $70,000 a year for five years for moving his

company to Newtown, and now he's ready to collect. The only problem is that

the town officials who held the initial talks with Mr Jones, former First

Selectman Bob Cascella and Community Development Director Liz Stocker, contend

they never made any such promises.

The miscommunication puts the town in a bind. Does the town forgo collecting

$350,000 in the coming years to honor an agreement it believes it never made,

or does it risk giving itself the reputation among business leaders as a town

that reneges on its commitments? Neither option is good for the town, but of

the two, it would best not to honor an informal, unwritten agreement. It is

not a good business practice, and we can hope that other business men and

women interested in moving to Newtown will see this incident in that light.

We question the value of tax incentives as a lure for business in general. It

would take a tremendous amount of industrial development in Newtown to make a

meaningful impact on the tax rate - more development than most townspeople

would be willing to accept. And giving tax breaks only pushes the town further

away from the break-even point where public services rendered are offset by

tax revenues collected. The town should make every effort to be a good place

for people to live and to work. That means local government should not mislead

business leaders, even inadvertently.

The Economic Development Commission, the selectmen, and the council should get

together and reconcile their various positions on this issue so that a single,

clear, and precise policy on tax incentives can be formulated. When a town is

trying to sell itself, clarity wins over confusion every time.