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Settling tax debt imperative for future abatements

It’s good to see the county taking care of the business of protecting our tax revenue. Monday, commissioners on the Ellis County
Commissioners Court approved a settlement that would end two years of arbitration on unresolved tax debt by a company based out of Illinois.

That company obtained an abatement for the construction of a new building in Midlothian and enjoyed the break for three years — never meeting the benchmark for hiring that was part of the abatement agreement, the county says. That would constitute a breach of the contract between the company and Midlothian and the county governments to whom the business owners would need to make significant tax payments to cover the unpaid portions claimed under the abatement.

Nearly $400,000 has been marked for the county, and that’s no small sum. This situation also illustrates the tenuous nature of business and industrial development. Reports of similar situations, even involving companies who have looked at Ennis and gone elsewhere, are not uncommon. Ennis has, at least in recent years, avoided the somewhat messy business of arbitration in the approach of breached tax abatement agreements, and that’s a mix of good fortune and good planning, we’d imagine. Bottom line, protecting the fairness of our tax system is ostensibly more important than the $379,380 that this situation involves for the county and the city of Midlothian.

The rules put in place to govern the abatement process are meant as a means of stimulating business growth, and businesses have tended to look at Texas as a positive place to do business in no small part because of those breaks. When a company, for whatever reason, fails to fulfill its end of the abatement bargain, the abating agency is absolutely bound to get the money owed to it.

This situation took several years to come to settlement, and we are disappointed in that if only because it represents a drag on the county’s economy during that period. We’re glad to see the situation coming to a solution, and if Midlothian approves the abatement settlement tonight, the county will have its needed recourse.

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Posted by on May 11 2010. Filed under Editorials. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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