Friday, October 28, 2011

Mayor Ballard Cites Failed Navistar Clawback as Evidence of Holding Companies Like Litebox Accountable for Tax Breaks

Listening to WIBC on the way home tonight, I heard Indianapolis Mayor Greg Ballard respond to the Litebox fiasco with assurances he would hold the company accountable for the jobs that were promised.  Ballard cited the example of his making a company pay back $5 million when it failed to live up to its job promises.

Mayor Greg Ballard
Ballard is talking about Navistar.  A decade or so ago, Navistar had received an $18 million abatement.  In 2009, the company laid off 1,000 employees. At that point Navistar clearly owed the City of Indianapolis $23 million under the contract.  In a bizarre move by City Legal, the case was settled for a mere $5 million.  City Legal Attorney Jonathan Mayes trotted out the bogus explanation that it was being settled for such a low amount to avoid legal costs.  Of course, City Legal's attorneys have fixed salaries and it was merely a contract interpretation matter, not one likely to result in years of litigation.   There simply was no reason for the City to give away $18 million of the $23 million it was owed.

But the story didn't end there.  In July 2011, Navistar offered to hire 250 more people and again asked for a tax abatement.  The City eagerly handed one over, even though the company had stiffed the City on $18 million in a previous deal.

If that is what Mayor Ballard thinks is holding a company accountable for not living up to job commitments, Lord help us.

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