By Ella Chabot-Remington
SEBASTIAN — Sebastian city leaders will find out in November whether or not their citizens will support an effort to bring new businesses into the city when voters head to the polls.
Before that happens, though, County Commissioner Peter O’Bryan wanted the Sebastian City Council, and its residents, to know that the county fully supports the plan.
O’Bryan spoke on the tax abatement referendum question that will be part of the Sebastian municipal election ballot during last week’s meeting.
“Back in February, we had an economic summit that you all graciously hosted up here,” O’Bryan said. “I presented a very similar program to this for the county. The basics of the program are the same. The tax abatement programs are allowed by the Florida statutes. They do require a voter referendum for approval. The abatement programs are good for a 10-year period. You can renew your abatement program after the 10 years.”
The purpose of tax abatements is to provide incentives either for a new business locating in Sebastian or for an existing local business that wants to expand. The aim is to help the City of Sebastian compete for manufacturing businesses or bring in high quality jobs to the community, according to the commissioner.
“It gives you a new economic tool,” said O’Bryan, adding that one of the first questions asked by businesses considering locating to an area is often if there is a tax abatement program. When the answer is “no” dialog might go no further, O’Bryan said. But when the answer is “yes” other questions follow.
Tax abatement shows businesses that “the city is committed to being business friendly and having opportunities for jobs,” the commissioner said.
Noting that the surrounding communities of Palm Bay, Brevard County and St. Lucie County all have tax abatement programs, O’Bryan said, “It brings you up to the level of competing with counties and cities that also offer tax abatement programs.”
“The city will receive the full tax value once the abatement is over,” O’Bryan added. “The city will receive additional sales tax from the inventory and businesses and taxes that go on that are not abated, and it won’t impact the schools, the mosquito control district, the hospital district, the Sebastian Inlet district. The abatement only applies to city taxes.”
O’Bryan explained that a tax abatement program does not give away any tax dollars.
“The best way to consider a tax abatement program is a tax freeze,” he said. “You’re going to set the level of taxation here, and then you’re not going to increase it any higher.”
O’Bryan told the Sebastian City Council that there could be flexibility factored into tax abatement when the ordinance is drafted that determines the level of abatement to be given to companies based on their value to the local economy.
When the ordinance is drafted, the City of Sebastian can offer higher or lower abatement levels to companies based on the number of jobs created, the wages of those jobs, and the amount of the company’s capital investment. For example, a small company with a lower level might receive a 100 percent tax abatement the first year, an 80 percent abatement the second year, a 60 percent abatement the third year, and then after five years may be no longer eligible for the abatement. A larger company with a higher level might qualify for a larger abatement for a longer period of time.
O’Bryan concluded his remarks by presenting a unanimous resolution on behalf of the Board of County Commissioners supporting the City of Sebastian’s tax abatement initiatives for November 2009.