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Local economic development incentives have led to one expansion, and another announcement is waiting in the wings.
During a special joint meeting of the Taylor County Fiscal Court and Campbellsville City Council on Monday, magistrates and council members gave Economic Development Authority Executive Director Ron McMahan the OK to move forward with a project that would bring additional jobs to Taylor County.
Each took separate votes. Fiscal Court members gave the motion unanimous approval. City Councilman Stan McKinney cast the lone "no" during the Council's vote, saying he had more questions than answers. The action came after an hour-long closed session.
"I appreciate the judge, mayor, Fiscal Court and City Council's commitment to public service and the important and sometimes difficult decisions they have to make for our community," McMahan said. "I especially appreciate the meeting's united, community spirit and their willingness to move Campbellsville/Taylor County forward."
McMahan said that the project involves the potential expansion of an existing business.
Because state incentives are involved, the name of the company and other details cannot be revealed until the Kentucky Economic Development Finance Authority grants approval, McMahan said. That approval will likely come in April.
Once that happens, the company would be eligible for local incentives.
The City adopted its incentives package in January 2010. The County adopted its package in November.
McMahan said having the incentives has helped get Taylor County some notice from companies looking to expand.
"The incentive is a good tool to have in our tool bag when new or expanding business prospects ask if we have local incentives available to induce their development in our community," McMahan said. "Our local elected officials were very proactive when they considered and approved the incentive last year. They should be commended for their action.
"To date, INFAC North America has applied for and received approval for the local incentives. Our local incentives and the state [Kentucky Business Incentive program] incentive was very instrumental in their decision to expand their operation in Campbellsville/Taylor County in 2010."
The City incentives take the form of a three-year tax abatement, while the County offers a five-year term. A tax abatement means the business would not pay occupational taxes for the specified period. The business must be manufacturing, agribusiness, a regional or national headquarters or non-retail/technology service. Eligible businesses must create a minimum of 10 full-time jobs for Kentucky residents and maintain at least 10 jobs for Kentuckians annually. Wages must be at least 125 percent of the federal minimum wage and benefits must be provided. The business must also commit to a capital investment of at least $100,000 and have been approved for state incentives.
To apply, McMahan said, expanding or relocating businesses would discuss their plans with him, plans which would ultimately be reviewed for possible recommendation by the EDA Board. Once that happens, the business would submit a letter to the Fiscal Court and City Council outlining the project. Magistrates and council members would then decide whether to grant the incentives.
McMahan said he doesn't know what other communities offer.
"That is not information most communities are willing to share."
McMahan said Taylor County's incentives are performance based, meaning the incentives are not paid for with taxpayer money.
"All levels of government are facing stagnant or decreasing tax receipts because of the current economic climate," McMahan said. "It is difficult for governments to meet the demands of businesses when they ask for cash, up front, net present value incentives (difference between the value of benefits and cost) to offset their project start-up costs. If the expanding or new company produces the jobs, they get the future tax incentive over a specified period of time."
State incentives are typically greater than local incentives, McMahan said. One of the most commonly used state offerings is the Kentucky Business Incentive program, which offers tax incentives for 10 years. The credits include up to 100 percent of the corporate income or limited liability entity tax arising from the project and up to 4 percent of the gross wages of each employee.
The Kentucky Economic Development Finance Authority approves state incentives.
"The state incentive benefits are typically much larger than local incentives, but both are equally important in the competitive job creation environment," McMahan said. "We are in competition with every community in the United States and a large portion of the world."