In The Beginning: The Marion Urban Enterprise Zone was designated in November 1992. At that time, the Marion General Motors Plant was in danger of closing, the business vacancy rate was 10 percent, unemployment in the Zone was 13.28% and over 30% percent of the housing in the proposed Zone was in need of major repair. In an attempt to retain General Motors and to address the poverty issues facing Marion, the City of Marion applied to the State of Indiana for Enterprise Zone designation. The state awarded the designation; and as a result, a "toolbox" of tax incentives was awarded to Marion to help retain and attract business to Marion's most blighted areas. The most commonly known and widely used tax incentive in the enterprise Zone toolbox was the inventory tax abatement, which granted a 100% abatement on inventory tax for a business located in the enterprise Zone. This particular Zone tax incentive assisted General Motors by relieving a significant tax burden, thus retaining 1,700 of the highest paying jobs in the City.

In addition to providing tax incentives included a reinvestment component that provides the funding stream for the local urban enterprise association to offer additional programs and services to businesses and residents within Marion's Enterprise Zone. These funds have been utilized since 1994 to accomplish these main objectives:

• Encourage capital investment in the Zone
• Aid in the retention and attraction of jobs in the Zone
• Improve the physical quality (appearance or structure) of the Zone
• Increase employment opportunities for Zone residents

To see examples of MUEA successes in meeting these objectives, click here.

Recent Changes: In 2002, the Indiana General Assembly passed legislation which enacted the phase-out of inventory tax in Indiana (link to HEA 1001-2002SS) and permitted Indiana counties to effect an immediate elimination of the tax in their respective county. Grant County took a proactive approach to attracting new business and immediately enacted the burdensome inventory tax in 2003.

Marion's enterprise Zone became a "looking glass" into the future for enterprise Zones and legislators across the state of Indiana. The inventory tax abatement had been the program's main business attraction and retention tool. What incentive could be offered to entice businesses to remain in or locate to an enterprise Zone? The funding generated by the businesses paying 35% of their tax savings to the urban enterprise association was gone. What effect would this loss of funding have on the Marion community? The Marion Urban Enterprise Association experienced a 98% loss of funding; and programs not directly tied to state mandate had to be eliminated. Due to the foresight of the MUEA board of directors, the organization was able to turn to cash reserves to continue operations and some services while new incentives and funding streams were being explored. The MUEA assisted the Association of Indiana Enterprise Zones and the Governor's Study Commission assigned to examine the issue and develop new enterprise Zone legislation. In 2005, the Indiana General Assembly passed HEA 1120 providing Indiana Enterprise Zone businesses with the Zone Investment Deduction. In November of 2005, the Marion City Council voted to reauthorize the Marion Enterprise Zone.