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Reform is never pretty

By Jim Sack

Fort Wayne Reader

2013-02-28

Reform is never pretty: usually there are two sides and the gulf between the interests of the status quo and the reformers is wide. Frequently, neither side understands the intentions of the other. Often they talk past each other and, never quite hear the concerns of the other and, in the end, both sides walk away angry and frustrated.

So it has been with reform of the tax abatement system in Allen County, so it was at the most recent session of city council.

The abatement system has now been officially reformed. Council passed the new version on the 26th of February and sent it up to the Mayor for his signature. The session featured a PowerPoint presentation noting all of the changes, including many that critics Tom Lewandowski and Cheryl Hitzemann had worked for. They alone had forced council to consider the matter.

But, at the end of the presentation both citizens vented considerable anger in the direction of city council and toward Larry Brown, the former president of county council who had hijacked the reform process and caused blood pressure to needlessly rise on both sides of the issue.

The story is simple: Hitzemann and Lewandowski, working out of the Central Labor Council, had questioned the results of the abatement process which allows companies to avoid paying certain taxes in exchange for job creation and other criteria.

In researching that process, Lewandowski and Hitzemann found glaring problems that city officials, and especially city council, had overlooked.

When the two brought the problems to the attention of city council they were all but patted on the head and dismissed. Unfortunately for council, they kept coming back over and over again, pointing out new shortcomings and problems that they had found researching the promises of abatement recipients and the results.

In short, they pointed out that the city could not prove that the first job had been created for the hundreds of millions in tax dollars that had been abated, tax dollars that would otherwise have gone to support schools, roads, parks and public safety.

In short, the system was good at helping companies avoid taxes, but the city had fallen down in its responsibility to make sure the public, as well as the companies, benefited.
In short, the winners seemed to be the companies, the economic development staffs and the politicians who could all wave abatements and claim progress in job creation. The community was left holding the bag.
The two citizens, Tom Lewandowski and Cheryl Hitzemann, continued to ask for proof, but none could be found. They held their own public hearing to put more pressure on council to reform the system. Their goal was verifiable job creation.

Meanwhile, Tom Smith, then president of city council, decided to tackle the issue. He appointed rookie councilman Russ Jehl to produce a Fifth Tuesday Seminar on the question. The result of the seminar was the formation of a committee of city and county council members to reform the rules surrounding abatements.

And, here is where the train ran off the tracks. Former County Council President Larry Brown promised to involve all “stakeholders,” as he called the various groups interesting the abatement process, including Lewandowski and Hitzemann, as well as the media.

What followed was series of meetings where no notice was sent to the public. Lewandowski tried to find dates, times and places for the meetings but calls and emails were not returned. This reporter also tried to attend sessions, but our calls and emails were not answered.

Only when a friendly city council member passed on the date of a meeting were we able to attend. Seems, however, that representatives of the Chamber of Commerce had been invited.

Brown had made it a point to exclude those people who had pointed out the problem in the first place and who had worked so diligently to bring reform to a derelict system.
There had been no dialog, no openness, no cooperation. So, when at the end of the presentation on the 26th a city councilman noted that the goal had been to align city and county abatement policy, Lewandowski thundered in response that the goal had been to create jobs. That fundamental misunderstanding was the result of Brown’s closed door, closed ear policy. The committee never heard the real complaints to the two protagonists. Consequently, Brown’s policy failed to improve trust or communications, failed to further the public good.

As for the reforms, Councilman Jehl was roundly celebrated as introducing changes that put the emphasis on job creation, on higher wages and benefits, fundament reforms which Lewandowski and Hitzemann had called But oversight and enforcement remain insufficient, and if a company fails completely to fulfill promises there is no way for our community to recover lost tax revenues.

But, moreover, it was the way Councilman Brown hijacked the process that created so much animosity. Brown chose to lock out the public and in so doing created mistrust and fostered cynicism. It was his favoritism toward one group over others that created the impression of cronyism. He missed an opportunity.

The process is now officially reformed. And, they have changed the name of the process from tax abatement to “tax phase-ins.” You know the line, putting lipstick on a pig.

Toward the end of the discussion, Councilman Dr. John Crawford cited national studies that have indicated abatements are a suspect method of creating jobs or developing an economy, that only around 10% of abatements could be shown to deliver the promised results, he added.

None of his colleagues came to his support. In the economic development community they call the idea of dumping the abatement game as “unilateral disarmament,” in other words, because other communities use a system we should follow suit. One out of ten.
So, the abatement debate is over for a while, or at least until another glaring abuse appears that forces government to stop patting constituents on the head and listen to concerns.