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A proposal to give Lynchburg businesses a one-time tax break in hopes of stimulating the local economy gave rise to a heated debate among City Council members on Tuesday.
Councilman Turner Perrow, who acknowledged the idea was a “little radical,” suggested the city consider taking $1 million from its capital improvements fund to pay for an across-the-board cut in business license taxes.
The capital improvements fund supports certain one-time expenses, such as roadwork, building repairs and downtown revitalization projects. Removing $1 million from it would allow the city to offer a more than 10 percent discount on its business license taxes.
Perrow described his proposal as a “one-time, one-year local stimulus” that will give the business community a boost in these rocky times.
“I think we have to look at this as an investment,” Perrow said. “… We can’t help our businesses increase their sales, but we can help them decrease their expenses.”
Councilman Michael Gillette pressed Perrow for a cost-benefit analysis of such a maneuver, which Perrow acknowledged he didn’t have. Gillette specifically asked whether the city would see a quantifiable return on its investment and which capital improvements would have to be cut from the budget to pay for it.
“You don’t know if it’s going to work and you don’t know what it’s going to cost,” Gillette said. “You’re just taking a shot in the dark.”
Perrow said he brought the idea forward Tuesday to get council’s reaction and was not yet prepared to offer a detailed plan. Both he and Councilman Scott Garrett, who supported the proposal, noted they recently met with a series of business leaders who expressed a need for some relief.
“We have been told repeatedly that they are getting squeezed in this declining economy and profound recession,” Garrett said, adding that “high taxes” were part of the problem.
Garrett, who is currently running for the House of Delegates against incumbent Shannon Valentine, jump-started this issue last month by calling for the creation of new business incentives. The topic was placed on the agenda Tuesday at his request.
The debate that ensued was dominated by Gillette, Perrow and Garrett as the three sparred over the practicality of the plan on the table. Gillette said while he agreed the city should support local business, he thought it was “short-sighted” to cut city services to do it.
He also questioned the effectiveness of stimulus programs in general, saying flatly, “I don’t like bailouts. And I’d like to see a hell of a lot more hardnosed reasoning in these stimulus packages.”
Garrett, who said his primary goal in this endeavor was to create jobs, said the city has to pursue creative ideas to help the community through this recession.
“We’ve got to get people back working,” he said. “If we don’t do that, we’re just going to continue to flounder. We’ve got to affirm we’re open for business and looking for opportunities.”
Perrow said council clearly needed to discuss the issue more. Officials tabled the matter after half an hour of debate.
“I’m looking forward to continuing this discussion,” Perrow said. “Maybe we can get some traction on this and help our local businesses.”
Reader Reactions
Whoa, Labby. You seem to have a lot of pent up energy there.
Hmmm. Gillette questions throwing “tax dollars” at businesses and you accuse him of throwing tax dollars around. Dodson is one of the most if not THE most pro-business councilman and he’s a Democrat. Meaningful new business in town? How about BWX growing and locating downtown, the growth of LU, the planned shopping center off Lakeside Drive, the Wal-Mart on Old Forest Road, etc., etc.
Yup, Gillette is a little testy at times, maybe even arrogant. I don’t like that in him either. Still, he’s asking the questions that anyone who opposed GM and bank bailouts were asking. I bet you were totally opposed to the GM and banks bailouts, right? And, the stimulus package? So, how’d the tables get turned and our local Republican’s now are in favor of bailouts? Why is it ok now?
Councilman Michael Gillette is such a joke. The only purpose he thinks private business serves is to fund his uppity ventures whatever that might be today. He never questions throwing taxpayer dollars at anything, yet even after the City has lost so much business to the counties, he still questions doing anything for them.
When will the residents of Lynchburg realize that the Democrats on City Council are the reason that you don’t have any meaningful business locating to Lynchburg? And what business you do still have left is either by luck or despite the efforts of the Democrats? The same is true in Richmond. That’s why we need a Republican landslide in Richmond this year and one in Lynchburg come next. We need leaders who understand that without business and the jobs that they create, govt lacks the ability to do anything positive except release a lot of hot air.
Not a bad idea, lookatu.
Perrow at least is honest in his assessment of his proposal. More homework is needed
I wonder if Garrett, who repeatedly has said the Federal government spending is out of control (due to stimulus and bailouts?) will support stimulus by robbing from Peter to pay Paul.
Other questions…what is Lynchburg’s unemployment rate and how would a stimulus impact? Why do our businesses suddenly now talk about taxes hurting them? When the economy is good, I don’t hear much. Will the stimulus help business as Gillette asks? Given that Lynchburg revenues will likely shrink again due to poor sales tax revenues, is it smart to rob from needed services to keep business afloat? And, did either Garrett or Perrow comment against the 5th Street Roundabout which did provide design and contruction related jobs and business opportunities.
I also remember that Garrett voted “no” supporting businesses applying for low income housing tax credits in order to build affordable housing. Low income housing tax credits cost the locality nothing, provide significant dollars in the community and lower business taxes, all in a straight forward manner. Now, he wants to support a business stimulus which will cost the city plenty?
Why not give all the tax payers a break and we can spend more money with the business which would increase their profit margin. The number one suggestion I have is to put a stop to the garbage collection fee of $80.00 a year. This extra tax was added to garbage collection to keep the Real Estate tax at a lower rate to make it appear that we have a low tax rate. It should be added to the Real Estate tax so we could deduct it from our income taxes. It’s a tax, but try to claim it on your tax return.
“Gillette specifically asked whether the city would see a quantifiable return on its investment and which capital improvements would have to be cut from the budget to pay for it.“
OK Mike, please tells us the “quantifiable return” on the $10 million tax dollars spent downtown on cobblestone streets and shoe hotels and traffic circles. Had that money been left in the bank drawing interest the return to the taxpayers would have been better!
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