Target Corp. will compensate the Village of West Jefferson for lost income tax dollars.
The action comes after the Tax Incentive Review Board determined that the retail distribution center fell short of promised employee counts as outlined in its tax abatement agreement with the village and local school district.
If the compensation agreement is approved, Target will pay the village $50,000 annually through 2012. The company also will not taper payments to Jefferson Local Schools, even though state tax laws have changed to eliminate the tangible personal property tax in four years by decreasing the tax 25 percent each year after 2006.
Target’s corporate heads and West Jefferson council have approved the agreement. The school board is scheduled to vote on the matter June 9.
If the school board approves the agreement, monies awarded to the village will be split evenly between the parks and recreation department and downtown improvement projects, said West Jefferson Mayor Scott Hockenbery.
“The village thinks this agreement is best for all parties involved. It allows the schools to keep income they might have otherwise lost, and allows the village to make up for income that they would have received if they had the number of jobs stated in the (original) agreement,” he said.
The compensation solution was initiated after the Tax Incentive Review Board met March 20 to complete an annual review of all entities in the village that receive tax incentives.
The review board includes: a Jefferson Township trustee; the Madison County auditor; West Jefferson’s law, finance and service directors; West Jefferson’s council president, one other council member, and the mayor; and the Jefferson Local Schools superintendent.
The review board found that Target did not fill the requirements of its original agreement, mainly due to technological implementations that automated certain warehouse processes.
“Sometimes technology outpaces these agreements, and that was not anticipated when (Target) applied for the abatements,” said Hockenbery, who noted the positive impact Target has made on the village.
Most recently, Target sponsored West Jefferson’s Community Safety Day on May 10 and has given several donations to various projects in the village.
“This agreement shows how much the Target Corporation is committed to making our communities better places to live,” Hockenbery said.