The county’s largest employer has come back to Water Valley’s city officials, asking for the second year in a row for a tax exemption stemming from a 2001 addition at the plant.
Mississippi law allows an ad valorem tax exemption for county and city taxes for up to 10 years for new investment made by businesses and industries. In 2001, BorgWarner added an extra $4 million to the tax rolls with a new line, and the city portion of the taxes on this addition cost the company $115,000 to $120,000 annually.
It a tough decision for aldermen – the city is looking at a possible tax increase in the coming year just to maintain the current level of city services. In fact this request is a little different, the company did not ask for the exemption before it came on the tax rolls and the city has become used to receiving the tax income since 2002. The city has counted on the income during budgeting since that time.
On the other hand, officials in just about any city or county in the state would jump at the opportunity to grant the ad valorem tax exemption to shore up better-than-average jobs at a long-time employer – especially in a shaky economy.
In fact county supervisors didn’t hesitate last year, granting the company’s request for a county tax exemption as a routine measure.
Last year’s denial from city aldermen came after a lengthy executive session during a September 4 board meeting. Later two city officials both admitted the tax exemption was discussed during the executive session in that September 4 board meeting, a move that was illegal.
As a result of the closed meeting, Aldermen did not bear intense scrutiny from the public concerning their decision until two weeks later, when BorgWarner officials questioned the decision.
At the next meeting, held on September 20, officials from BorgWarner sat down with aldermen and discussion was held publicly, in an open meeting, as it should have been all along.
BorgWarner Plant Manager Bill Liacone described for city officials the highly competitive North American auto market and difficulties faced by the local plant in competing with foreign sources located in China, Korea and Mexico.
“We have a couple of years to get our cost in line to be successful so we can bring business in and perpetuate the plant,” Liacone told aldermen last September
This tax structure “is one of the major pieces that is causing us to be not competitive,” Liacone continued.
Aldermen now have to revisit the issue with this year’s request.
We hope that the public will be allowed to hear the discussion from city officials when the decision is made.
After all, that is the law.