Industrial board grants tax breaks
By Martin Burkey
DAILY Staff Writer
email@example.com · 340-2441
The Decatur Industrial Development Board as expected unanimously approved a package of tax breaks for expansions at 3M and Meow Mix.
Meow Mix plans to spend $2.5 million to add a couple of dryers to its pet food manufacturing operation. The additions will create five new jobs with an ultimate payroll of $284,110 including pay and benefits.
"It's very helpful," General Manager Jay Dahlgren said. "We try to present the most attractive project we can. We compete for capital within our company."
Local 3M officials hope abatements will help them land a $120 million expansion project that would create 20 jobs initially and 50 jobs within three years with an estimated payroll of $4.24 million in pay and benefits. Company officials told the board that two other 3M sites are in the running for the work and that the company board is scheduled to make a decision in February. Construction could take about two years.
"We think our chances are strong they will come here," plant Manager Rebecca Morlando said. "Our plant has worked hard to put ourselves at the top of the list. The employees have worked hard. I think our board will recognize this."
The abatements were the first granted by the board since getting approval from Decatur City Council members to assume the responsibility. State law in 1962 gave either local governments or their industrial boards the authority to grant abatements. Most other cities in the state already assign that job to their industrial boards. City Council members said last week that the board is better able to handle abatements and that the switch takes the politics out of a sometimes-controversial issue.
Critics of the breaks say that Decatur is an attractive city for a new industry without abatements and that existing companies would invest in plant upgrades. Supporters say competition between cities for new industry is as competitive as college football recruiting.
Other cities and nationwide companies are also quick to take note of cities that won't grant tax breaks for expanding an existing industry, they say.
The board with Meow Mix agreed to forego $128,820 in state, county and city taxes over the 10-year abatement period and still expects to receive more than $140,000 in tax revenue for the city's operating fund and schools during that period. With 3M, the board agreed to forego $5.4 million in state and county taxes during the 10-year abatement period in order to generate tax revenue estimated at $5.8 million for schools.
Industrial board attorneys John Caddell and Barney Lovelace noted that the projects will continue generating their full tax revenue after that. It also helps keep both companies competitive within their own corporate structure as well as against other competition. The 3M abatement, particularly, would help secure the plant's existing 734 jobs, they said.
"If we didn't do this project, it wouldn't be any different," Lovelace said. "We're not abating something they're paying now. We're abating something they want to create."
Subscribe for only 33¢ a day!