A proposed Terre Haute city ordinance would require any company that obtains a tax abatement to pay workers at union-scale construction wages to construct or renovate a building.

It also requires contractors and subcontractors on tax-abatement supported projects to hire workers as employees, not as independent contractors, which would require providing coverage of health-care benefits to workers “at a reasonable cost.”

Opponents say the proposed ordinance would drive up the cost of construction and make Terre Haute less competitive with other cities.

Billy Livvex, business representative of the Indiana Regional Council of Carpenters Local No. 133, at 118 N. Third St., said Monday that workers in Terre Haute should receive some benefit from tax abatements similar to benefits provided to business.

“It is not a nonunion or union issue. It is a jobs, community issue,” Livvex said. “We are looking at the community as a whole giving something.”

Livvex said Terre Haute’s proposed ordinance is based on an ordinance passed in 1999 in South Bend. A similar ordinance has been adopted in Muncie and ordinances requiring medical insurance or random drug testing have been adopted in Evansville and Vincennes, he said.

“We feel like it is time with the recent million dollars that the city’s Redevelopment Commission gave away for the downtown hotel and the $550,000 of EDIT money that was used to build [new Margaret Avenue] for Wal-Mart. We are not getting a single local job out there for our community and they are not paying state and local taxes to their employees out there,” Livvex said.

Livvex provided check stubs of workers from a Kansas-based masonry firm building a new super Wal-Mart on Terre Haute’s east said. Only federal, Social Security and Medicare withholdings were made, no state or local taxes withheld, according to the check stubs.

“If other communities can do it and take care of their own, why can’t Terre Haute?” Livvex said. “It’s that simple. It’s a jobs issue, nothing more. We are giving to a developer or industry, why shouldn’t they take the first stand when building to help the local workers?”

Under the proposed ordinance, the City Council “shall evaluate more favorably a project whose owner represents that it will pay higher percentages of total fees for construction work associated with the project to companies licensed to do business in city of Terre Haute and having their principal place of business located in city of Terre Haute,” according to the proposed ordinance.

It requires a contractor and subcontractor to file monthly payroll records for each worker on the project with the city’s Board of Public Works and Safety and verify under oath that the common construction wage has been paid to each worker on the project.

Failure to meet these conditions shall revoke any or all previously granted tax abatement.

Gary Morris, president of Clabber Girl Corp., said Monday he thinks the proposed city ordinance “is not a competitive thing for our city to be doing. We are trying to grow the city and be involved in economic development.

“If you look at the playing field, with the people we are competing with, they aren’t doing this. So we are trying to play in the game, but not using their same rules. If you don’t, you won’t be competitive,” Morris said.

“Our products at Clabber Girl and our manufacturing plant is [union] organized and we have a wonderful work force,” Morris said. “I would really love to be able to say you should only purchase our products because our folks are all union, but the real world is I have to go out and be competitive whether I am union or nonunion or otherwise.

“It means you must have some offering that is of value to somebody for them to part with their money,” Morris said. “That is what we have to do every day and that is what we as a city and community must do.”

Rod Henry, president of the Greater Terre Haute Chamber of Commerce, said the chamber opposes the idea.

“I do think it will place us in a category of not being competitive,” Henry said. “Our whole approach is the development of a business-friendly environment free of obstacles to growth and development. This [proposed ordinance] certainly is an obstacle to growth and development,” Henry said.

Henry said Chamber members have read the ordinance and know it is modeled after an ordinance approved in South Bend.

“Terre Haute is not like South Bend, we are our own community. We are seeing a lot of positive movement right now with projects and activity happening. It is our concern that this will dampen that level of excitement and interest in taking a look at our community for growth,” Henry said.

“This is saddling a business with mandates. There are a lot of communities, communities we are in competition with, that are very welcoming and open-arms. That is what we have to become, is more and more that way. That isn’t anti-union, but it is pro-growth,” Henry said.

A similar proposal was presented to the Vigo County Council in 2002, and the council did not adopt the resolution.

That resolution also would have required union-scale wages and contractors and subcontractors to hire workers as employees instead of independent contractors. That proposal was different in that it would have required at least 40 percent of construction workers be Vigo County residents.

A committee that includes all members of the City Council will look at the proposed ordinance at 4 p.m. Thursday in a meeting room on the first floor of City Hall.

Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.


— A committee of Terre Haute City Council members will review the ordinance at 4 p.m. Thursday in the meeting room of the Terre Haute Board of Public Works and Safety, on the first floor of City Hall.

Summing it up:

Pay up: A proposed Terre Haute city ordinance would require any company that receives a tax abatement to pay union-scale construction wages to workers.

Hire me: It also would require contractors and subcontractors to hire workers as employees, thus paying health-care benefits.