EGP seeks tax abatement from county
By: John Brannon Messenger Staff Reporter
By JOHN BRANNON
Messenger Staff Reporter
Two proposals to abate property taxes for the $170 million Ethanol Grain Processors plant now under construction near Obion have been submitted to the Obion County Commission.
The proposals were crafted by the Obion County Budget Committee when it met Monday at the Obion County Courthouse. County commissioner Danny Jowers presided.
Officials attending included Obion County Mayor Benny McGuire and budget committee members Polk Glover, Steve Rice, Dwayne Hensley, Ralph Puckett, Robert M. Barnes and Jerry Grady. Bedford Dunavant of the Union City Industrial Development Board also attended.
Discussion of abatement of EGP taxes was vigorous.
Jowers said the EGP board wants “some kind of tax abatement” for the significant investment in the facility that would produce about 100 million gallons of ethanol and other byproducts each year. In this context, “abatement” means mitigating, or forgiving, a certain percentage of property taxes each year for a certain number of years.
Dunavant served as a liaison between EGP and the budget committee and county commission. He said he agreed to do so because the county does not have an industrial development board but the City of Union City does. Therefore, he represented EGP in discussions with county government. He said he’s worked with the county on previous occasions.
“To get the actual abatement, it will have to be in the name of some industrial development board,” Dunavant said.
The EGP plant is scheduled to be operational on Sept. 1. Taxes on the overall property occupied by the plant are calculated at $232,000 a year. “That is what it would be with no abatement,” Jowers said.
In one approach, the budget committee turned down an EGP proposal to pay a “flat rate” of $15,000 a year the first five years of operation.
“We’re saying that’s not enough,” Jowers said.
Instead, the budget committee crafted two proposals, each of which is to be submitted to the Obion County Commission when it meets May 19. “The county commission can look at them, amend them, do whatever it wants to do with them,” Jowers said.
The proposals, as approved by the budget committee are:
• Proposal 1: Years 1 through 5: Abate 50 percent of the $232,000, which is $116,000. Years 6 through 10: Abate 25 percent, or $58,000.
• Proposal 2: Years 1 through 5: Abate 75 percent of the $232,000, which is $174,000. Years 6 through 10: Abate 50 percent of the $232,000, which is $116,000.
“They’re talking about a payroll of $1 million a year,” Jowers said. “I explained how much we stand to lose when the Plastech plant in Kenton closes on June 30. Plastech had a payroll of $4 million a year, plus property taxes.”
Dunavant said he will attend the May 19 meeting of the county commission to be available to answer questions that commissioners may have.
“They will consider the two proposals and any others that may come up,” he said. “Hopefully, we’ll be able to quantify the economic impact and determine what is a fair payment.”
Published in The Messenger 5.7.08