VERO BEACH –The Vero Beach City Council Tuesday approved a measure that would give voters a chance to approve a tax abatement policy to encourage new businesses that might open within the city.
Mayor Kevin Sawnick spearheaded the effort to place the tax incentive issue, formally called a referendum on Economic Development Ad Valorem Tax Exemption, on the November ballot.
Over the past few months, he has been meeting with the other cities’ mayors about various issues, not the least of which is economic development. The City of Sebastian approved tax abatement in November 2009 and the Board of County Commissioners voted to place the matter on the ballot this fall.
“In conjunction with the other cities and the county, I think we’re moving in the right direction,” Sawnick said.
The measure passed 4-1 with Councilman Brian Heady dissenting. Historically, Heady has been opposed to selective tax incentives, which he considers unfair if property taxes are displaced to other residents and businesses paying the full amount of taxes.
“To exempt one party is to increase the tax burden to someone else, because the expenditures aren’t going away,” Heady said.
Councilman Tom White, who ultimately voted in favor of the measure, raised the point that attracting new businesses is a great goal, but that the city should not stop there in creating business-friendly policies.
“This is all well and good to help the new businesses, but what about the existing businesses?” White asked.
The tax abatement would apply to the expansion of existing businesses so long as that expansion led to the creation of more jobs.
White, who owns Tee-Jays Trophy Shop with his wife, suggested that allowing competing businesses to open up free of some of the taxes being paid by long-standing businesses could give an unfair advantage to the new business.
“It’s a burden on existing people who have been here paying the taxes, you need to do something for the existing businesses also,” he said.
Councilman Ken Daige, who has called for Vero Beach to host its own Economic Summit on May 11, strongly supported the measure, which would lay the groundwork for voters to approve the city’s ability to craft a resolution to accomplish tax abatement.
“Right now, we need to do something to help this community economically,” Daige said, adding this is “one of the things we can do.”
The Nov. 2 ballot could prove crucial as it will also give voters a chance to select members for four open council seats currently held by Sawnick, White, Daige and Vice Mayor Sabin Abell.
Heady is the only member of the council not up for re-election this year.
Should the required 1,060 signatures be collected, a referendum regarding the city’s future in the electric utility business may also be on the ballot.