That's Appreciation

We are always hearing how we need more industry in the community for jobs and taxes. This might be true but sometimes with industry come downsides like air pollution, bad smells and such. So it becomes a balancing act. Is the tax base industries provide worth the possible negatives?

Just last week, the Air Quality Task Force heard complaints, again, from residents about the ash fallout from Kimberly-Clark damaging their property. For years residents have complained about the pollutants and odors coming the Tate-Lyle plant. But at least we have the tax base to offset the industries damages, right?

Best I remember, Kimberly-Clark is in the third year of a five year, 50% tax break they requested from local governments. Just last year, Tate-Lyle also asked for a 50% tax break on a proposed expansion and got it from both Loudon County and the city of Loudon.

Now comes both Tate-Lyle and Kimberly-Clark asking for a massive reduction in their tax assessments. It's a long and complex issue but the crux of the matter is that both have appealed their assessments to the state after rejecting the offer made by the Loudon County Assessor's office to make some corrections to their current assessments.

Bottom line, it could take a year or more for the matter to go through the state appeals process but in the mean time, neither company will have to pay the disputed portion of their tax assessments. Both Loudon County and the city of Loudon will not be able to collect the disputed portion of the taxes. This means both governments will loose several hundred thousands of dollars in tax collections this year.

If at the time the appeals are decided by the state, the two companies could have their assessments reduced and never have to pay the taxes, or the state could side with the county and the city and the two companies would have to pay the full tax obligation with interest and penalties or the state could make a decision somewhere in the middle whereby the local governments would still loose some amount of tax revenue. Pretty much anyway it goes, the tax payers are going to loose.

The implications are significant. The county stands to loose the most but because the county's revenues are so much more diverse the loss will be manageable. However, the city of Loudon's loss will have a huge impact. Currently, Loudon has put their budget adoption on hold for 2011-2012 waiting to see if the two companies would appeal to the state. Well they did. Now it's very possible, the city will have to raise property tax on all their residents just to cover the loss.

Thanks Tate-Lyle, thanks Kimberly-Clark. It's truly unfortunate that our corporate neighbors have decided to essentially stick it to everybody especially after local governments have bent over for them a number of times. But this is the danger small local governments find themselves in when they put so many of their chickens in one basket.