County bows out of tax abatement plan

• Nobles

Nobles

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WORTHINGTON — In a 3-2 vote Thursday morning, Nobles County Commissioners denied a motion to join the City of Worthington and District 518 schools in offering tax abatement for new home construction in the community.

Discussion regarding the tax abatement proposal has been going on for several months. Following a Nov. 28 meeting with representatives from each of the three entities, the original proposal — geared to single-family homes valued at more than $200,000 — was revised and the length of the tax abatement was reduced from five years to three years.

The abatement would remain at 100 percent during those three years, said Brad Chapulis, Worthington’s director of community and economic development.

Board chair Diane Thier has been against the proposal since it was first presented, and the change in the length of the abatement did not sway her.

“I have made no secret of the fact that I am not for this,” she said. “If you can build a house like this, you can afford to pay the taxes.”

Thier said if those home buyers get tax relief for three years, the tax burden is going to fall on residents who have less expensive homes.

“The school district has mentioned different times that they need a new school,” she added. “Why would you abate taxes then? I am just not in favor of this. Almost 80 percent of the property taxes are paid outside the city of Worthington.”

Commissioner Marv Zylstra asked if the city and school district would continue to move forward with the proposal if the county objected to being a partner, to which Chapulis replied that the benefit would diminish.

“The power of the program really lies with the three,” Chapulis said, adding that the Worthington City Council planned to have a “more formal discussion.”

Chapulis explained that tax abatement for homes of $200,000 or more was proposed because those homes do not qualify for existing state and federal home buying programs.

He said the homes that could potentially be constructed under the tax abatement plan would widen the tax base when they were added to the tax roll, which would bring more money to all three entities through the annual levy.

“My personal feeling is this tax abatement proposal is a three-legged animal and if one of those legs was to be knocked out, it would completely collapse,” said Commissioner Bob Demuth Jr.

“I believe the ad hoc committee is the dog and they’re expecting a bone from us — they may not like the size of the bone, they may not like the texture of the bone and they may not even like the taste of the bone, but I think we need to offer a minimum to move this thing forward … so it’s not perceived that we took the legs out from this three-legged animal.” Demuth Jr., said.

While Zylstra said he respected Demuth’s position, he too reminded board members that he was against the proposal from the beginning. He said he has received numerous phone calls and letters from people within his district who were opposed to the tax abatement plan.

“I just really have a difficult time wrapping my arms around it,” he added.

With Zylstra and Thier clearly opposed to the abatement, and Demuth and Commissioner Vern Leistico offering their support for the plan, Commissioner David Benson said “it’s not fun to probably be the swing vote on this.”

He stuck to his statements of earlier meetings in which he suggested the abatement remain in place only until the home is occupied.

“I’m really having a hard time with this, and I respect your work, Brad,” Benson said. “I guess I’m not going to support it. I’m sorry. It’s really a difficult decision.”

Ultimately, Leistico moved to support the proposed abatement for each single-family home on newly developed home sites only, and Demuth offered the second. They voted in favor of the motion, with Thier, Zylstra and Benson opposed.

Chapulis thanked the board for its consideration, and said a housing problem remains in Worthington.

“I hope that you participate as we try to solve the issue,” Chapulis said.

Tags: news, county, tax, abatement, plan