Tate & Lyle seeks tax break
Loudon mulling proposal that would give company 50 percent cut over 5 years
Hugh G. Willett knoxnews.com
Loudon County Commission and the city of Loudon are considering a resolution that would offer a five-year tax break to the DuPont Tate & Lyle Co.
According to a proposal submitted by the Loudon County Economic Development Agency earlier this week, the biofuel company is asking for a 50 percent tax break over a five-year period.
The proposal would cost the city about $120,000 and the county more than $185,000 in lost tax revenue. Tate & Lyle would make payments in lieu of taxes in the amount of about $61,000.
The tax abatement would be an incentive to support an almost $20 million expansion of the company's Loudon facility and could result in up to five new jobs, according to Pat Phillips, president of the Loudon County Economic Development Agency.
Loudon County Commission also is faced with the possibility of raising property taxes to fund a $37 million school building program.
Commissioner Bob Franke has been lobbying to build a new school in his district of Greenback. The request for the tax break seems incongruous with the need to raise more money for schools, he said.
"The timing is not good," Franke said.
Franke said he hasn't yet made up his mind on how to vote on the request. In the long term, the tax break could actually result in an overall net increase in revenue to the county, he said.
The expansion will create jobs, not only at Tate & Lyle, but in the construction industry as well, he said. Net tax revenue will increase with the expansion and will grow even more after the five-year moratorium expires, he said.
There is also the remote possibility that the company could close or downsize the facility if the county rejects the plan.
"They've been a very good employer in Loudon County, and we wouldn't want to do anything to risk losing them," he said.
Loudon resident and local pharmacist Eddie Ratledge addressed the commission earlier this week.
Ratledge said he agrees that Tate & Lyle has been a good corporate citizen and a source of economic growth in the community but questions whether the county can afford to give tax breaks at this time.
In the past year, the county has not been able to provide raises for county employees and teachers. The county also is struggling with building new schools.
"What does this say about the importance of education? Is this really the right message to send to our children?" Ratledge said.