MOUNT VERNON — Sacrificing short-term gains for long-term benefits is the essence of how tax abatements are intended to work for a community. A city, for example, passes up the property tax revenue that would be generated by a new business or an expansion of an existing firm, in return for the creation of new jobs and increased tax revenue from the people hired to fill the new jobs.
The city doesn’t lose anything and it receives immediate benefits in the form of income and sales taxes from the increase in local employment, Mount Vernon Mayor Richard Mavis pointed out.
Tax abatements have become standard practice in the efforts of local government to attract new businesses to a community or to encourage businesses to expand and create new jobs. They’ve become so standard that local government and development officials consider them a requirement to compete on a level field with other communities. Mavis and Area Development Foundation President Steve Waers both commented that local governments have to offer rebates or businesses will go someplace that does.