The Liberty County Development Authority audit approved Monday put a price tag on the tax abatements LCDA uses to lure industries to locate in the county.
About $3.8 million.
The LCDA audit says the 13 industries that pay no property taxes pump more than $78 million into the local economy through the employees’ payrolls, a “win-win.”
In 2017 the authority abated $1.9 million in real property taxes. The school system would have gotten the largest amount of this: $912,000, with county government, the hospital and the authority itself losing smaller amounts.
For personal property, $1.9 million was abated in 2017; the schools would have received $860,000 had these taxes been paid.
The audit of the development authority’s fiscal year July 1, 2016, through June 30, 2017, was the first to be subject to the federal Government Accounting Standards Board’s Statement 77 requiring disclosure of tax funds used to induce industries to locate in the jurisdictions. The authority uses leases to accomplish tax abatement like the case of Hugo Boss which has an operation in authority’s Midway Industrial a Park.
LCDA owns the land and rents it to Hugo Boss. The monthly rent paid to the authority is $96,450 and an extra $120,000 is paid annually.
Job creation and economic investment requirements are written into the agreements between industries and the LCDA and compliance is monitored.
In an audit note LCDA says, “The authority is confident that the economic gains to our community greatly outweigh any ad valorem property tax temporarily abated under its economic development program.” The authority points out that many of the businesses benefiting from abatement are located on formerly undeveloped land used for timber harvesting or other uses that produce only modest tax income.
Four of the county’s top ten taxpayers are current or former participants in LCDA’s economic program, the authority said.
Tax abatements are for a specified time period; 46 percent will expire in the next three years, 23 percent in the next five years, another 23 percent in nine years and the final eight percent in 15 years.
The LCDA says it is fully committed to transparency and substantial public information is available on its website:
http://www.lcda.com/
LCDA: Deals add $78 million to economy
Tax abatements cost $3.8 million
