Today the City Council approved a tax abatement for Medline Industries in Mountainview (District 3). The abatement is 75% for 7 years, for a total of $879,530 forgone. Medline is going to expand its warehousing facility and hire additional employees.
I am becoming more and more cautious in approving tax abatements, which reduce the amount of property taxes a company pays to the city. (Sometimes other taxing entities — county, DISD, the community college district — join in; usually they don’t.) I will go into my philosophy at a later date, but wanted to explain my thoughts on this particular abatement.
We need to use tax abatements sparingly, and when we do, we need to use them to encourage particular economic ends. Such as improving the lives of people who live in South Dallas. Again and again we talk about economic development in the Southern Sector, but what does that really mean if it’s not focused on improving the everyday lives of the people who live there?
During our discussion today, I asked Medline how many of their employees live in Dallas. Their representative said about 45%. I also asked the Medline representative what kind of jobs they held, and he said mostly warehouse jobs.
I would like to see our businesses, particularly those in South Dallas, hire people who live in South Dallas. Let’s give them jobs and take care of our residents.
I pointed out that while I would support this tax abatement (because it can stimulate the economy in South Dallas and because they employ Dallas residents), I want to see an EMPLOYEE RESIDENCY requirement in future tax abatements. I talked with our attorneys, and we’ve done it in the past and can do it again. If a company wants US to invest in THEM (by allowing them to forego paying property taxes), then THEY should be willing to invest in US by hiring Dallas residents.
The Mayor obliquely criticized the idea of creating residency requirements, claiming that the marketplace is too competitive to place “additional restrictions” on the companies receiving tax abatements. I couldn’t disagree more, but will elaborate in another blog.
The tax abatement passed unanimously.