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Wednesday, December 07, 2005
Environment - Ethanol plant earns Wells limited backing
"Ethanol plant earns Wells OK with tax backing" is the somewhat misleading headline to this story today by Rebecca Green in the Fort Wayne Journal Gazette. Check this earlier ILB entry for background and links. Today's story reports:
BLUFFTON – The Wells County Council voted unanimously Tuesday to use economic development income tax money to back the financing for a proposed $134 million ethanol plant, but their support is far less than investors in the project had wanted.The economic development income tax revenue would only be spent if the plant were built and then failed.
Officials with Indiana Bio-Energy LLC had been asking the council to back a $50 million bond to help build the 100 million gallon plant on the western edge of Bluffton.
During a lengthy presentation Tuesday night, the investors offered the council a proposal to back a $31.6 million bond using county adjusted gross income tax dollars.
But the council expressed concerns about using adjusted gross income tax money, viewed as “property tax money,” to pay for a private business venture.
The council instead voted to back the bonds with about $500,000 a year in economic development income tax dollars if the project defaults.
The amount approved by the council is about one-third of what the investors requested.
“I know that every single one of us on council is in favor of this project,” Karolyna Farling said. “But we’ve been put in an impossible situation.”
Indiana Bio-Energy, made up of a group of local investors including a Wells County commissioner and the chief executive officer of the Wells County Chamber of Commerce, wanted the council to make the decision by the end of the year so they could take advantage of guaranteed construction costs. * * *
Farling described the quandary council members found themselves in, accused of being against the project if they expressed any negative opinion.
“But never before has a private company come and said, ‘We’re going to start a business, and we want you to take some taxpayer money and give us a loan,’ ” Farling said. “I just don’t feel that people in my districts have ever, they have not, given me permission to spend their tax dollars on private enterprise.”
The investors asked the council to sign a non-binding resolution supporting the project, a proposal dodged by the commissioners earlier in the week.
The investors left before the council voted on the matter. [Attorney David] Dale told the council that if the council could not support the project, the investors would likely take the project to another county for development.
“If this doesn’t go forward here, than we’ve lost three months of time and thousands of dollars trying to do something nice for our home county,” Dale said.
The council would not vote on the resolution, but instead voted 7-0 to use any available county economic development income tax dollars to help back the project, but not to use any property tax money.
“No one is against the project, but they’re all against the funding,” Councilman Larry Brown said.
Posted by Marcia Oddi on December 7, 2005 08:03 AM
Posted to Environment | Indiana Government | Indiana economic development