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Displaced by factory, neighbors challenge tax break

US Supreme Court to hear Ohio case

TOLEDO, Ohio -- Two months before her home was demolished to make way for a Jeep plant, Jean Kaczmarek walked into her backyard and clipped a few leaves from her plum, apricot, peach, and cherry trees.

She framed those leaves as a reminder of the place where she and her husband raised three daughters and planned to grow old together. They moved out in 1999 -- after their home was bought by the city -- and a year later her husband died of a heart attack.

''It hit him so hard I think it affected his heart," the 75-year-old woman said. ''The house held so many memories for us. It wasn't just mortar and wood. It's something you put your whole life into."

Now, some seven years after Kaczmarek and her neighbors lost the battle to save their homes, the dispute is about to be heard by the US Supreme Court.

The high court will hear arguments Wednesday over whether the tax break Ohio used to persuade DaimlerChrysler AG to build the assembly plant was constitutional. The decision could have national impact because nearly every state uses tax breaks or other incentives to attract companies.

The former neighbors, who received legal help from consumer crusader Ralph Nader, say taxpayers should not have to pay for private businesses wanting to expand or move their operations.

The US Court of Appeals for the Sixth Circuit in Cincinnati sided with the neighbors two years ago, striking down Ohio's practice of granting companies tax credits on new equipment. The court said the practice hinders interstate commerce because the incentives are available only to businesses that invest in Ohio.

Business groups and lawmakers in several states say that ruling could hurt economic development throughout the nation and put US manufacturing at a disadvantage against foreign competitors.

The ruling could also jeopardize tax breaks for job training and research and development that states use to attract businesses, said Dorothy Coleman, vice president for tax and domestic economic policy with the National Association of Manufacturers. ''Incentives play a role in deciding where you're going," she said. ''And it affects the abilities of states to attract businesses."

To keep Jeep in Toledo, the state and city put together an incentive package worth about $300 million for a new assembly plant. The plant opened in 2001 and has about 3,600 hourly workers.

To clear the way for the factory, the city bought and leveled about 80 homes and 16 businesses. Some homeowners contended that the city offered them less than what their homes were worth and that no money could replace the memories they lost. Homeowners and businesses first fought the plant by challenging the city's use of eminent domain. The Supreme Court rejected that appeal last summer. The challenge to the tax incentive is their last hope.

It is too late to do anything about the plaintiffs' long-gone homes and they are not seeking monetary damages. Instead, they want to establish a legal principle and hope to see the state, the city, and the automaker rebuked for taking their homes.

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