South Bend council ties property tax breaks to minimum wage

2017-10-12 | South Bend Tribune, Ind.

Oct. 12--SOUTH BEND -- It took longer than expected, but Common Council member Regina Williams-Preston said the administration's requested changes to her proposed ordinance setting a minimum wage for employers that receive property tax breaks ultimately led to a "much better bill."

The process also has prompted her to introduce a second bill specifying how the city will enforce promises that employers make to receive breaks.

Under the city's property tax abatement ordinance, employers already can receive larger breaks by paying higher average wages. But this bill makes it impossible to receive any abatement unless the employer pays its lowest-paid worker at least the $10.10 minimum hourly wage that city of South Bend employees receive.

Retired University of Notre Dame economist Marty Wolfson helped Williams-Preston craft the bill, but she also credited Mayor Pete Buttigieg for some of the inspiration.

"This comes out of mayor's directive to be a model of equity and equal opportunity," she said. "This is an opportunity to not just live our values but more importantly, be responsive to what's going on in our community. There's a lot of people living below or at the poverty line. This is one way that when we bring jobs, we're not just bringing jobs, but good jobs."

Williams-Preston has said she believes most abatement recipients probably already pay all of their employees at least $10.10 an hour, but the bill ensures that will happen, and includes seasonal and part-time workers.

The bill initially had been scheduled for a final vote Aug. 28 before the Buttigieg administration sought the following changes that were incorporated into the final version:

--It will take effect Jan. 1, rather than immediately, to give employers who have been considering seeking an abatement more time to plan. It will only apply to abatements granted after Jan. 1.

--It includes language noting that tip income, which is not common among abatement recipients, will be included in calculating an employer's lowest hourly wage.

--The lowest paid worker's pay, as long as it didn't already exceed $10.10 per hour when the abatement was granted, must increase at least 2 percent annually over the term of the abatement.

Of the changes, deciding how an abatement recipient's lowest-paid workers' pay would grow over time sparked the most debate on the council. As introduced, the bill would have required such employers to always mirror the city employee minimum wage at all times, giving the city more control over abatement recipients' pay scales.

Williams-Preston credited the 2-percent-annual-increase language to an idea from Sue Kessem, a citizen who regularly attends and speaks at council meetings.

"That way they're keeping up with the changing times, and we're also being responsive to the needs of business so they have some certainty and know exactly what's going to happen over the next five or 10 years," Williams-Preston said.

Input from another citizen led Williams-Preston to introduce a second bill regarding enforcement, planned for debate and a final vote at the council's next meeting Oct. 23. Paul Tipps, a citizen member of the council's Community Investment Committee, has noted the need to somehow monitor compliance by employers.

The second bill would:

--Force employers that receive abatements to notify their workers of the minimum wage requirement, in writing when they are hired and in places throughout their buildings where Equal Employment Opportunity Commission posters are displayed.

--Require an employer receiving an abatement to tell the city's Department of Community Investment, in writing, within the first four months of each year of the abatement, that it is complying with the abatement ordinance.

--DCI would randomly audit at least five abatement recipients each year and certify their compliance.