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February 8, 2012

Hogan: More freeport exemptions would mean borrowing money

Rachel Brown rachelbrown@daltoncitizen.com

CHATSWORTH — Supreme Carpet Inc. President Dan McEntire said Murray County can’t afford not to raise tax exemptions on inventory.

Murray County Sole Commissioner Greg Hogan says the county can’t afford to raise them beyond the existing 20 percent.

Every time another 20 percent of business inventory is exempt from the freeport tax, he said, the county loses close to $50,000 and Murray County Schools nearly $129,000 each year.

“It’s hard to do this in the middle of a recession,” Hogan said during a public commissioner’s meeting on Tuesday. “Things are tough.”

“It’s tough,” countered McEntire, who along with other Murray business owners pays annual taxes on his inventory, “but it’s tough on all of us.”

He said businesses now have to consider moving their goods to Whitfield County, where officials recently switched from taxing 80 percent of an inventory’s value to taxing none of it. Hogan said Whitfield County likely raised their exemption, from 20 percent to 100 percent, too early for their own good.

Whitfield County government is expected to lose $1.2 million because of the move, while Whitfield County Schools will lose $2.2 million. The school system faces a $7 million shortfall for the fiscal year that begins in July, and Whitfield County commissioners had to take $6.3 million from their reserves just to balance their current year’s budget.

Yet McEntire said he’s concerned Murray’s higher tax rate will not only make things harder on established businesses but discourage new ones from moving in, and that’ll mean the tax base would shrink at worse and at best not grow.

Steve Angelea, a Murray County Chamber of Commerce board member and local manager for Georgia Power in Chatsworth and Ringgold, said he agrees with McEntire.

“We think the exemption should be raised as much as possible,” he said. “We just can’t afford to lose any more industry.”

Hogan said he would consider the matter again but cautioned he couldn’t raise the exemption percentage without borrowing money to fund basic county services.

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