Since the start of the year, the number of companies eying Whitfield County as a possibility for a new or expanded facility has jumped dramatically, says Elyse Cochran, executive director of the Dalton-Whitfield Joint Development Authority.
“We have gone from an average of 1.5 projects coming in a month. Now, we are averaging two new projects a week. That’s the sort of difference we are seeing,” she said.
What has driven up the interest in Whitfield County? Cochran says a number of factors are coming together, but key was the October 2011 decision by the Whitfield County Board of Commissioners to raise the “freeport” property tax exemption for many types of inventory to 100 percent from 20 percent, effective at the start of this year.
“Is that activity specifically due to freeport alone? No, we can’t measure that. But it is one of a number of things that we and local governments have been working on,” Cochran said. “We now have the Carbondale industrial park, one of 17 certified development sites. We’ve been doing aggressive marketing for the past four years, and that has started to pay off. And now we have 100 percent freeport.”
Cochran says that 100 percent freeport makes the Carbondale Business Park even more attractive to companies because much of their inventory there will be untaxed.
Cochran says the type of firms that are looking at Whitfield County indicates that freeport is a key part of the equation.
“The majority of the projects we are getting now are automotive part suppliers. They typically maintain a lot of inventory, so I think we can assume that freeport is a key factor for where those projects will locate,” she said.
But Cochran admits that so far Whitfield County hasn’t landed a big project because of freeport.
Board of Commissioners Chairman Mike Babb says he knows that local residents are waiting for such a project.
“We knew this would be a long-term investment that would have a short-term cost. But we did it because we knew it would make us more competitive,” Babb said.
The move cost the county budget some $2 million this year, almost equal to the revenue that will be generated by the 1-mill property tax increase the board approved in October. It also cost Whitfield County Schools about $3 million this year, or about half the revenue that will be generated by the 4-mill tax increase the Board of Education approved in September.
“I wouldn’t say that we regret the decision. But I would say that if we had it to do all over again we would have raised it 20 percent a year, which I think was the original plan, and not all at once,” Babb said.
After voters approved freeport in 2008, the board set the exemption at 20 percent, which was unchanged until last year.
Babb said commissioners were spurred to act following the announcement last year that Lowe’s would locate a distribution center in Floyd County that is expected to employ 600 when it is fully up and running in 2016. Local officials believed that with its access to I-75 and two railroads, Whitfield County might make a good site for such a center, but the county was never considered.
“We were never under consideration for the Lowe’s distribution center simply because we didn’t have 100 percent freeport,” Cochran said.
Dalton to keep exemption at 20 percent
Though the county has moved to 100 percent freeport, Dalton Mayor David Pennington has said city officials have no plans at this time to increase the city’s exemption from 20 percent.
“We’ve said all along that we are not going to move if it’s going to hurt the school system, and right now they are telling us they can’t afford it,” he said.
Does that put the city at a disadvantage?
“To attract some of these prospects we are trying to attract, we abate their taxes anyway, so going to 100 percent isn’t really going to make much of a difference if their taxes are abated,” Pennington said.
He said freeport is part of the city’s plan to attract new business but not the only part.
“We asked voters to approve freeport (in 2008) because we stuck out on a map then as one of the few places without any sort of freeport,” Pennington said. “But if the county is getting more inquires because of freeport, is it going to get fewer because the county schools increase their tax rate and the Board of Commissioners increase their tax rate? When you cut one tax and increase another to make up for it, I’m not sure you’ve gained anything.”
Cochran says freeport is only one component in what firms look for when deciding where to locate or expand. But she says it’s often one of the first they look at and a community can get ruled out quickly based on it.
“Most states in the Southeast have a statewide exemption on inventory taxes, so I think most companies are looking for that. There are very few counties left in north Georgia that don’t have some freeport exemption, and more and more counties on the interstate have gone to 100 percent or are moving there,” she said.