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March 7, 2010

Commissioners eying increase in freeport

Jamie Jones Dalton Daily Citizen

DALTON — The freeport inventory tax exemption could cost Whitfield County significantly more than was forecast when it was put on the ballot two years ago, say county officials. Or it could cost significantly less. Or maybe about the same as forecast.

No one knows for sure and probably won’t until the county collects taxes this fall.

Voters in both Dalton and Whitfield County approved separate freeport resolutions in 2008 that allow the county and city to exempt some types of inventory from property taxes. The goal of those who backed the freeport exemption was to make the area more attractive to business. Whitfield County was one of just 15 Georgia counties with no freeport.

Both the city and county rolled back taxes 20 percent this year on those classes of inventory, so the tax statements that will go out this fall will be the first to be affected by it.

“We don’t have any hard estimates as to how much is carried in those classes of inventory that are exempted by freeport. We’ve never kept track before because everything was taxed at the same rate,” said Whitfield County finance director Ron Hale.

When the referendum was first discussed two years ago, Hale said his best estimate was that rolling taxes back 20 percent would cost the county government about $247,000.

“Last August, I got some numbers from the tax assessor’s office. They told me they expected inventory subject to the freeport is $188,801,416,” Hale said.

He said when he ran the numbers based on those figures, the 20 percent exemption would cost the county $382,000.

But more recent information from the tax assessor’s office indicates the 20 percent exemption will cost the county about $150,000.

“We won’t know for sure until we get the tax returns this fall,” Hale said.

Why the wide range in estimates?

“A lot of this is movable inventory. It’s very easy for these firms with multiple sites to load it up and take it to a county with a higher freeport exemption,” Hale said.

At a meeting of the Dalton-Whitfield Joint Development Authority last Thursday, board members asked county Board of Commissioners chairman Mike Babb if the county plans to continue to increase its freeport exemption beyond this year’s initial 20 percent.

“We had planned to go 20 percent a year for the next five years. A few weeks ago, we discussed doing 40 percent next year and 40 percent the year after that,” Babb said.

But he said some commissioners were concerned about the costs of moving that swiftly, not just on the county budget but on the county school system’s finances. He said commissioners also want to work in concert with the city so the community doesn’t have differing freeport exemption rates.

“There’s no need in us doing that and then the school system saying ‘That will cost us a million dollars, so we are going to raise the millage rate,’” he said.

In 2008, Whitfield County Schools estimated the first 20 percent freeport exemption would cost it $461,824.

Babb said commissioners plan to gather more information before deciding on how fast to increase the freeport exemption.

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