The Bloomington City Council officially granted Catalent tax abatements in hopes the bio-manufacturing company expands its local plant.
The majority of council members said the potential expansion is a chance for job and wage growth. However, some members questioned the use of tax abatements to lure a potential investment, and others recognized the lack of detail in the proposal.
The vote Wednesday confirms an initial resolution passed Feb. 16. However, the $350 million expansion is not guaranteed. If selected, Catalent would add 1,000 jobs over the next five years with an average salary of $60,000.
In total, $340 million of the investment would be for personal property equipment, and $10 million would be designated for real property.
The first tax abatement is a 90 percent relief on personal property tax for 20 years. The estimated total value is $2.1 million in abated taxes per year, or a net present value of $28.5 million. This is the first time Bloomington has offered an abatement longer than 10 years. The second abatement is a 50 percent break on real property tax for 10 years, with a total net present value of $638,000.
Councilmember Steve Volan opposed the resolution and said Bloomington homeowners are disproportionately affected by the abatements.
“The only substantive tax on business in the state on Indiana anymore is the personal property tax,” Volan said. “If we abate this much, it’s going to wind up being paid by homeowners.”
Economic and sustainable development director Alex Crowley pushed back against that idea.
“The point is not whether a hypothetical investment without an abatement would lower someone’s tax bill,” he said. “It’s rather that the overall community benefit and broader economic growth will help Bloomington thrive long into the future.”
Currently, 52 percent of Catalent’s nearly 3,200 employees live in Monroe County. However, it is unclear as of Wednesday how many of these employees live in Bloomington. Additionally, it is unknown how many new county/city residents would be hired, as well as how many people would be moving to the region.
“The argument made by Catalent and by the administration has a logic that runs something like this: ‘Catalent is a great employer, and it has succeeded our expectations. We want job growth and good wages. We’re worried they might go somewhere else. Therefore, we should grant a $30 million tax abatement,’” councilmember Matt Flaherty said.
He said he is not opposed to tax abatements, but he has not seen financial justification as to why the abatement is a necessary condition for the potential expansion.
Flaherty cited Indiana code and questioned if the area to be deemed an economic revitalization area “is undesirable for or impossible of normal development and occupancy and have conditions so impaired values as to prevent a normal development of property or use of property."
Matt Flaherty is an at-large representative on the Bloomington City Council. He was first elected in 2019. (Courtesy: City of Bloomington)
Councilmember Sue Sgambelluri said this vote, along with most big decisions council makes, is based on incomplete information.
“We don’t know the details and nuances of what’s available and what’s being promised,” she said. “Could the land in question ever be developed absent something like this abatement? The most I seem to be hearing tonight is ‘possibly.’”
Organizations including the Bloomington Economic Development Commission and the Greater Bloomington Chamber of Commerce spoke in favor of the tax breaks. However, some residents opposed the idea.
“How much longer do we want to couple ourselves in this community to this type of conventional economic activity?” Joseph Wynia said. “Because in the face of a destabilizing climate, a crashing planetary ecosystem and dwindling energy of resources, should we be bringing in more of the same thing that has been driving these for the last century?"
However, councilmember Dave Rollo said he thinks this economic sector has a soft ecological impact.
“It’s not an extractive industry,” Rollo said. “It doesn’t produce tremendous amounts of pollutants. It enhances human well-being in terms the biologics it produces- at least on balance it does.”
He said the corporation has also committed to reduce carbon emissions 15 percent by 2023.
Council passed the resolution by a 6-1-2 vote. Councilmember Flaherty voted against the legislation, whereas councilmembers Kate Rosenbarger and Volan abstained.
Additionally, council canceled its committee of the whole meeting scheduled on Mar. 9.
