Guest Column: County would pay twice if it approves abatement for Meijer developments

By Steve Schultz
Winnebago County Board member, District 3

Thursday, March 13, Sunil Puri of First Rockford Group gave a presentation regarding the Rockford and Machesney Park Meijer supermarket project development sites and requested a $689,710 tax abatement over a five-year period from the county. This abatement would only relate to the outlot segment of the Rockford site, where other businesses would be located, not the Meijers stores. Both of these sites are on Perryville Road.

Puri cited a Northern Illinois University study of the two projects, indicating that between sales taxes and real estate taxes, these combined projects would bring in an additional $6,300,110 of revenue for the county over the same five-year period. This additional revenue to the county, along with the difficulty of attracting businesses to our area as a result of the high real estate taxes we have, was the argument for giving the abatement.

The very large investment of tax dollars in building and maintaining Perryville Road (and its many extensions) was intended to produce a payback to taxpayers when and as that corridor was developed and new tax revenue was generated. This would not only justify the size of the taxpayers’ upfront investment, but also provide funds to maintain this new superhighway and build other new roads, allowing for more economic development opportunities. The county builds the infrastructure, providing the opportunity for economic development to occur, immediately enriching the landowners along those corridors. The trade-off is that those landowner/developers will build or bring in new businesses, which increase the tax base and (in a best-case scenario) bring in sales tax dollars as well.

The county’s portion of your real estate tax bill in Winnebago County is about 7.5 percent. So, by completely wiping out this county revenue, First Rockford Group will reduce their bill on these outlot sites by 7.5 percent for a five-year period. As of last night, no other taxing bodies had agreed to participate in any tax abatement on this project. In my humble opinion, a 7.5 percent real estate tax reduction is not a big recruiting draw for prospective businesses looking to move into this development. It was presented as though this was critical for those sites to be filled.

On this same night, the board approved a $158,000 expense related to reconditioning 1.84 miles of shoulder areas of Perryville Road. One-hundred percent of this came out of the County Highway Department budget. The county must maintain the roads they build (even when some or all of the initial funding comes from state or federal funds). The tax revenue from development along Perryville should pay for these repairs, not the taxpayers whose dollars were used to build the road.

I am happy about the jobs and tax revenue these two developments will produce. Everyone knows we desperately need these kinds of projects. But why does the county believe they have to pay twice — when they build/maintain the roads that enrich developers and when those same developers do what they agreed to do when they were first enriched?

There is no doubt about whether this tax abatement will be granted at the March 27 board meeting. The votes were signed and sealed before the request was ever delivered. The board members were falling over each other to compliment Mr. Puri and thank him for doing this project. They see no reason not to enthusiastically agree to this request.

I do not fault Mr. Puri for making this request. He is just doing what any intelligent business leader does: increase revenue and lower costs. It is not a business owner’s job to look out for the interests of taxpayers. It is the job of our elected officials to do that.

Steve Schultz is a member of the Winnebago County Board, representing District 3 in Roscoe, Ill.

From the March 19-25, 2014, issue

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