Assembly unanimously approves manufacturing incentives

Property tax, water-rate breaks will depend on the size of the business

Posted: Tuesday, November 20, 2001

The Juneau Assembly on Monday unanimously approved new tax breaks and water rates for manufacturers, allowing larger businesses to take advantage of city incentives. But water rates might be up for more discussion.

Under the new ordinance, property tax and water rate breaks will vary depending on the size of a business. Assembly member Dale Anderson, who proposed the sliding scale of exemptions, said the measure would be a tool for the Juneau Economic Development Council to attract and keep business here.

"With these amendments, this ordinance is fair and equitable. It's business-friendly," he said.

Small manufacturers will receive bigger property tax exemptions and pay a lower water rate than will larger operations, according to the ordinance. Businesses that export more goods will qualify for bigger tax breaks. The tax rate will vary depending on how many years a business has been a part of the program.

The new ordinance increases the employee cap from 50 to 500 people. The Assembly first approved an ordinance with tax breaks for manufacturers in 1992.

Assembly member Jim Powell, chairman of the group's Finance Committee, began pushing for renewal earlier this summer. He was out of town Monday night, but at a committee meeting earlier in the day he asked the Assembly to implement a 500-employee cap and remove the sunset provision.

Assembly member Marc Wheeler offered four amendments to the proposal, all of which failed. Two of the amendments would have given the Assembly more time to work on the proposed water rates in consultation with local seafood processors.

"We don't have to address this at this time. It gives the industry a chance to respond before we proceed, in all fairness," Wheeler said.

Wheeler gave notice at the end of the meeting that he wanted the Assembly to reconsider the ordinance. It wasn't his intent to kill the ordinance, he said, just to give the city time to talk to seafood processors.

"We've taken the time to work with the cell phone owners, aircraft operators and boat owners," he said, referring to other interests affected by possible proposed taxes. "It's only fair we take a minute to involve seafood processors in this new proposal. If it's OK, we don't need to reconsider it on Friday."

Anderson, who earlier argued that the new water rates would benefit seafood processors, objected to the reconsideration notice. He said Wheeler was playing politics at the expense of the Assembly's credibility.

"This is nonsense," he said. "We worked hard to come to a conclusion on this and we came to a conclusion."

Wheeler and Anderson have been at odds this fall about a proposal to purchase land in the Mendenhall Valley for a new library.

A motion by Wheeler to remove the ordinance's five-year sunset clause failed on a 2-6 vote with Frankie Pillifant and Wheeler voting yes. Anderson, Jeannie Johnson, Randy Wanamaker, Don Etheridge, Ken Koelsch and Sally Smith voted no.

Koelsch said the sunset clause gives the Assembly a chance to improve the ordinance.

"I do see an advantage in the sunset clause," Koelsch said. "Many companies work on a five-year plan. ...I think it strengthens it, rather than weakens it and that's the whole purpose behind it."

Wheeler argued that businesses could count on the exemptions if the sunset clause was lifted. The Assembly can update the ordinance at any time, he said.

A motion by Wheeler to include computer software manufacturers in the ordinance failed on a tie vote.

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Joanna Markell can be reached at joannam@juneauempire.com.



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