Published: September 16, 2008 06:36 pm      

Officials say freeport tax exemptions needed

When Dalton voters go to the polls in November, they won’t face just one question on a freeport inventory tax exemption. They will actually have to vote on six separate measures.

Whitfield County voters who live outside the city will face three separate freeport questions.

“It’s confusing,” said Melanie Suggs, executive director of the Dalton-Whitfield Joint Development Authority.

Suggs and county officials spoke on Tuesday to the League of Women Voters of the Dalton Area about the freeport tax exemption.

Suggs said state law requires a vote on each of three different classes of inventory: partially finished goods and raw materials, finished goods stored by the original manufacturer and materials stored for shipment outside the state. Since the Dalton City Council and the Whitfield County Board of Commissioners have each placed freeport on the ballot, each of those three questions must be asked of both city and county voters. If approved by voters, the exemptions could go into effect in 2010.

Suggs said Whitfield County is one of just 15 Georgia counties without some form of freeport exemption, and the only Georgia county on I-75 without some form of freeport. She said that puts the area at a disadvantage in attracting new businesses or keeping existing businesses, pointing to carpet companies building plants and facilities in neighboring states with freeport.

Catoosa County, Suggs said, has had freeport since 1999 and currently exempts 100 percent of inventory.

“Since 1999, they’ve had a 70 percent increase in their tax digest,” she said. “During that period of time, Whitfield County has had a 52 percent increase in its tax digest.”

Gordon County has had freeport since 2003, Suggs said, and it currently exempts 40 percent of inventory.

“They have had a 30 percent increase since 2003 in their overall tax digest. Whitfield County over that period has had a 16 percent increase,” she said.

Bartow County has had freeport since 2004. It exempts 80 percent of inventory value. In addition, Adairsville exempts 80 percent, and Cartersville exempts 40 percent, Suggs said.

“Since 2004, (Bartow County’s) tax digest has increased by 27 percent. During that same time period, Whitfield County’s tax digest has increased by 14 percent,” she said.

There are no guarantees, Suggs said.

“But if you look at the numbers, and you look at the fact this makes us more competitive, and we know we are not at our most competitive now, freeport is the right thing to do,” she said.

The City Council and the Board of Commissioners have pledged to roll the inventory tax back 20 percent if the referendums pass. Several audience members asked why that won’t be on the ballot.

Suggs said the state doesn’t allow that. It only allows the voters to say the tax should be reduced. If voters approve the measure, local officials decide how much to roll it back, but Suggs said they could only do it in increments of 20 percent.

Board of Commissioners member Mike Cowan and chairman Brian Anderson said the tax could eventually be rolled back 100 percent. But they said it would have to be done in a way and on a timetable that doesn’t unduly affect the finances of the government or the school system.

“Let’s make sure we are not solving one problem and creating another,” Anderson said.

Tom Miller asked about the impact on the school systems and expressed concern that the tax burden would be shifted from business to other property tax payers.

Cowan said the plan is for new business and new growth to offset the revenue loss from the freeport exemption.