JACKSON, Miss. (AP) — Mississippi lawmakers want to open one of the state’s richest tax incentive programs to smaller projects, in hopes of helping the state recruit more businesses.
Senate Bill 2479 , which passed the Senate on Thursday, awaits Gov. Phil Bryant’s signature or veto. It would allow local governments to cut local and school property taxes by two-thirds on economic development projects worth $60 million or more.
Right now, the project must be worth $100 million or more to qualify.
Although any one piece of real estate or equipment can only get a break for 10 years, the bill says industries would get to use the abatement on expansions for 30 years, up from the current 20 years.
Most Read Nation & World Stories
- Smollett developments leave some baffled, others outraged
- Obama quietly gives advice to 2020 Democrats, but no endorsement
- He threw away a napkin at a hockey game. It was used to charge him in a 1993 murder.
- Coalition of states sues Trump over national-emergency declaration to build border wall
- Sailor in iconic V-J Day Times Square kiss photo dies at 95
“This is a very positive bill that will enhance our economic development efforts in Mississippi,” said Chad Newell, president of the Hattiesburg-based Area Development Partnership. “We obviously work on more $60 million deals than we do on $100 million deals.”
Called a fee-in-lieu of taxes agreement, the reduction can be worth tens of millions of dollars to the largest industries. Madison County, for example, reduced Nissan Motor Co.’s property taxes nearly $70 million from 2004 to 2015, according to figures provided by the Madison County tax assessor to The Associated Press.
Right now, for developments worth less than $100 million, cities and counties can abate taxes for 10 years, but can’t cut school property taxes. Senate Finance Committee Chairman Joey Fillingane, a Sumrall Republican, told senators Thursday that a company was considering building a $70 million-plus distribution center on the Jones-Forrest county line near the Hattiesburg-Laurel Regional Airport, but it was too small to meet the current threshold. He said county supervisors were willing to cut taxes, but “they simply just didn’t have the legislative authority.”
The Mississippi Development Authority lists only eight projects that it has assisted since 2010 that fall in the $60 million to $100 million bracket, but Newell said there are others, such as three recent solar farms built near Hattiesburg, that also would have qualified.
“There are real projects out there looking to come to our areas that would use this,” Fillingane said.
Some lawmakers and economic recruiters had favored lowering the threshold to $20 million, which would have opened the break up to many more developments, but lawmakers ultimately rejected that.
A few lawmakers questioned the move, though, asking if it would mean higher taxes for homeowners and small businesses.
“Are you concerned that the school districts are going to raise taxes on everybody to make up for this reduction?” asked Sen. Angela Hill, a Picayune Republican.
However, using reasoning common to economic incentive deals in Mississippi, Fillingane suggested it would be better to get some revenue from an expansion than to lose out entirely.
“A break on something is better than nothing,” Fillingane said.
David Rumbarger, president of the Tupelo-based Community Development Foundation, said the fee-in-lieu arrangement also allows local governments to use the revenue they do get to finance infrastructure improvements.
“The idea is for more projects to be competitive on a state-to-state basis,” Rumbarger said. “If you’re able to compete for the project and get the fee in lieu, it’s newfound tax revenue.”
The measure also includes a special provision that would allow Winston Plywood & Veneer to count federal disaster relief money received after a tornado struck Louisville in 2014 to qualify for the tax exemption threshold.
Follow Jeff Amy at: http://twitter.com/jeffamy . Read his work at https://www.apnews.com/search/Jeff_Amy .