YOUNGSTOWN, Ohio (WKBN) – Tuesday afternoon, Youngstown City Council’s Community Planning and Economic Development Committee heard of a new idea to bring business into the city. The proposal is to give companies tax breaks, but in this case, they would be income tax breaks.

Youngstown’s Director of Economic Development Sharon Woodberry presented the income tax incentive plan to council.

“You guys hear the same thing I do from every business which is the income tax being a challenge,” Woodberry said.

Youngstown’s income tax rate is 2.75 percent. The Job Creation Incentive Grant, as it’s being called, would only be for new or existing businesses that created a minimum of $500,000 in new payroll.

“As long as they’ve met that number and they’ve created the jobs and the income taxes that they proposed, the city reimburses 100 percent of the income tax,” Woodberry said.

The 100 percent reimbursement would be in the first year only. In the second and third years, it would be 50 percent, and the fourth and fifth years would be 25 percent. The grant would end after five years.

Upon receiving the reimbursement of the income tax money, companies would be free to use it as they pleased.

“Then yeah, they could give it back to their employees or they could, because they made $2 million in improvements, then use that money as an incentive to them,” Woodberry said.

Councilwoman Basia Adamczak supports the idea because it would force businesses to hold up their end of any deals with the city.

“Sometimes we would give a tax abatement and then they would not follow through. Whereas this, they’re getting it on the back end, so it sounds like a safeguard,” Adamczak said.

Councilmembers Anita Davis and Samantha Turner questioned if there should be a cap on the amount of money reimbursed. Davis says a million-dollar loss would be too much.

“We can’t afford to pay out that million dollars for them,” she said.

“We want it to be a lucrative enough tool for them to come here,” Woodberry said.

“I’d really like to see how we flush this out and get to a good space that works for us and a new incoming employer,” Turner said.

The income tax reimbursement plan is just an idea at this point. It’s still in committee and is at least six weeks away from being voted on by the entire council.