Richland slips through $6.7M corporate tax break. The public deserved to know more | Opinion
Richland City Council pulled a fast one on the public this week. With little notice, it quietly approved corporate tax breaks worth $6.7 million for a single company.
Maybe that’s a worthwhile investment in economic development and job creation, but it deserved public scrutiny and discussion.
Framatome Inc. has proposed expanding its nuclear fuels facility at Horn Rapids.
It will spend $39 million for a first phase that will create 20 jobs. A second phase will be much larger, costing $335 million and creating 200 jobs.
The minimum pay for those jobs will be $23 per hour, the state-defined “living wage.”
Framatome is in the city’s “targeted urban area,” a couple of miles north of the airport and Horn Rapids Golf Course. Inside such areas, referred to as TUAs, cities may award tax waivers to encourage industrial and manufacturing development.
Framatome’s tax breaks will extend over 10 years and will total $700,000 for Phase I and $6 million for Phase II.
Last summer, Richland became the first city in the state to create a TUA under a new state law and awarded its first tax break package to ATI Inc., a titanium manufacturing company.
On Tuesday, the council approved tax breaks for each of Framatome’s two phases. The city will forgo $6.7 million to help the French company succeed at Horn Rapids.
There’s certainly a case to be made that that’s a good public investment. The city created a targeted urban area to support large projects like this.
The tax breaks work out to about $30,000 per job, and each worker will earn more than that in a single year. Those workers will live in the region, will pay taxes and will put some of their income into the local economy.
Meanwhile, after spending hundreds of millions of dollars, Framatome presumably will operate the facility for more than a decade so would eventually pay taxes on its expansions.
Yet the city and the applicant didn’t make that case to the public. Instead, they took a path that minimized public scrutiny.
The city buried the tax break resolutions on an agenda released last Friday before the long New Year’s weekend.
They were innocuously labeled “Approving a Targeted Urban Area Application submitted by Framatome,” as if that would mean anything to most people.
They also were added as part of the consent calendar for the meeting. That’s the part of the agenda reserved for routine, uncontroversial council business. The council votes on it without discussion.
The tax breaks might have slipped by unnoticed while most people were thinking about holiday festivities.
They didn’t thanks to the careful attention to detail of one Tri-City Herald reporter. Wendy Culverwell spotted the resolutions and knew that $6.7 million in tax breaks is neither routine nor uncontroversial.
Culverwell’s reporting didn’t shame the city into slowing down and engaging residents. The council plowed ahead and approved the tax breaks on Tuesday without discussion or dissent.
The only person who spoke about the applications was Karl Dye, president of the Tri-City Development Council (TRIDEC), who showed up in support. He said they would be the first step to building “a global advanced nuclear fuel manufacturing facility.”
If the city had given the public a real heads up and time to review the details, some people might have raised concerns.
For example, someone might have pointed out that the Phase I application doesn’t appear to meet state legal standards for a TUA tax break because it is five jobs short of the minimum required.
Someone else might have asked what the penalties are if Framatome doesn’t deliver all of the promised jobs. Or maybe no one would have had any concerns and Dye still would have been the only person to speak.
Five Richland Council members took their oath of office Tuesday. Two had been re-elected. Two were appointees being seated as elected members for the first time. One was new to the council.
It’s a shame that one of their first official acts kept the public disengaged and in the dark. Voters surely had hoped for better.
