If you request a document from the city of Greenwood showing whether a company is following its side of an agreement to get tax breaks, you’ll see that the company’s spending on equipment is blacked out.
How much the company promised to spend on equipment is public information, but the amount the company has actually spent is allowed to remain confidential under state law.
State law requires companies to report the amount of money they spend on machinery and technology if a city or town is giving them property tax breaks on the equipment. If a company doesn’t provide that information, then a city can’t know if a business is keeping its promise to invest in the community in exchange for tax breaks.
The data cities and towns across Indiana collect from companies that receive a tax abatement is the same, including employee counts, assessed values of property and the amount they spent buying equipment.
But the information the communities share with the public varies. For example, Carmel and Greenwood don’t let local residents and taxpayers see how much companies have spent on equipment, while Brownsburg and Franklin supply the
companies’ full yearly compliance reports to anyone who asks.
Not making the investment information public means residents have to rely on city officials to determine if companies are keeping their commitments while getting property tax breaks, said state Sen. Greg Walker, R-Columbus, who represents parts of Johnson and Bartholomew counties. Cities and towns offer tax breaks to entice companies to build manufacturing plants and other facilities locally, hire local employees or to encourage companies to expand existing operations.
Under state law, governments have to show company equipment purchases on compliance reports, but the city can keep the dollar amounts private. Annual compliance reports, which show how many employees a company has hired, how much in salaries the company is paying and how much the company has spent to buy equipment, are what governments use to determine if a company is meeting its promises for investment and job creation, allowing them to keep tax breaks.
Those compliance forms are considered public information and can be given to residents who want to check if a company is hiring enough employees and paying high enough salaries to fulfill its commitments.
Greenwood gives out the annual compliance reports with the equipment purchases taken off. Carmel’s deputy clerk-treasurer, who files the companies’ yearly paperwork, stamps the forms with the word “confidential” and gives residents who ask for the documents a separate spreadsheet containing the business names, addresses, property descriptions and employee counts.
Until recently, Greenwood supplied all the compliance information, except for individual employees’ names and salaries, to anyone who wanted it. Last year, city attorney Krista Taggart looked at state law and saw the companies’ spending on equipment could be kept confidential. As a result, the city stopped making that information public, she said.
The law likely keeps spending on equipment confidential because the companies don’t want to publicize their spending for competitive reasons, Walker said.
“They are private companies. They are private contracts,” he said.
That doesn’t mean that cities couldn’t err on the side of transparency and tell companies up front that as part of the deal giving them tax breaks, their investment has to be made public, he said. Changing a city’s transparency rules after giving an abatement wouldn’t work, though, due to state law, he said.
“I see no reason why the elected officials couldn’t hold the companies to a higher standard. There’s no reason I can see why you couldn’t have a more transparent compliance, but not after the fact,” Walker said.
Brownsburg informs companies applying for an abatement that unless the businesses ask otherwise, the tax break-related documents they give the city become public record.
“If they don’t want to release it, then they might not want to apply for public assistance. No one’s making them apply for an abatement,” Brownsburg assistant clerk-treasurer Brian Hartsell said.
Franklin gives out all of the compliance data, except for specific employees’ names, salaries, Social Security numbers and other personal information. The total amount a company has spent to buy equipment is available for residents who want to compare it with what the business promised to buy, Franklin community development director Krista Linke said.
“It’s kind of like a competitive thing. If they ask us to keep their inventory list confidential, I just give the total that was spent,” Linke said. “Unless they specifically request that something be kept private, we don’t assume that it is.”