City Denies Tax Exemption Request From BorgWarner
By Jack Gurner
WATER VALLEY – Aldermen voted unanimously during the “first Tuesday” Sept. 4 board meeting to deny a tax exemption request from the county’s largest employer.
Officials at Borg Warner Air Systems had submitted an application for an ad valorum tax exemption for a 2001 addition at the Water Valley plant. A similar request to county officials was granted by Supervisors in August for the $4 million expansion.
According to Mayor Bill Norris, the amount of the city exemption would be “$115,000 to $120,000. It could be a little more.”
Mayor Norris added that the exemption would create a hardship for the city. “The board doesn’t want to create new taxes. If we gave them (Borg Warner) a tax cut it would be a drastic cut to services in Water Valley”
The tax exemption issue was not listed on the Board’s agenda for the meeting and the vote came immediately after Aldermen returned to regular session following an executive session at the end of the meeting.
Alderman Sherry Martin motioned to deny the request from Borg Warner, with Aldermen Alderman Fred White adding a second. The vote was unanimous, according to City Clerk Vivian Snider.
In a letter dated Wednesday, Sept. 5, Mayor Norris explained the board’s position to Borg Warner officials. “The city feels that the placing of the new electric lines at the cost of $110,000, the many years of use of city facilities at no cost to your company was considered in the decision,” the brief letter reads.
“Since the County is giving the company an exemption, and citizens pay county taxes, why does the City need to twice give an exemption? “ the board’s response continued.
A strongly worded email purported to be a response from a Borg Warner official has been widely circulated through the community. In the email, a tight global market and competition with foreign sources make the business extremely competitive and are cited as reasons the company needs the exemption.
Aldermen pointed to decreased revenue and a tight budget in justifying their decision.
“We’d like to give any industry a break,” Alderman Charlie Harris said, “But, we just can’t afford it right now.”
Alderman Lance Clement reiterated Harris’ position, explaining that the city couldn’t afford the exemption this year. “It’s something we want to look at in the future,” Clement added.
“We do regret not being able to do that at this time,” Martin said. She added that the city may be in a better position to grant the request next year.
“I voted for what’s in the letter,” Alderman Tommy Swearengen commented referring to the Sept. 5 letter containing the city’s response to the exemption request.
Fred White said, “It’s just too tight. It’s not that we don’t to help the company. Our budget would just not allow it.”