EDATES--Good for our Economy, Part II

EDATES allow the county to give valuable incentives to targeted industries in exchange for job-creation and footprint expansion.  This is not a bad thing, this is a GOOD THING!

In part one of this series I talked about the recent baseless and ignorant attacks on EDATES from the local media.

In this post, I want to talk specifics about EDATES....who gets them locally, what it costs the taxpayers in unrealized ad valorem revenue, and the value created by the BCC approving these agreements.

The complete list of all recipients of EDATES locally are contained on the spreadsheets here, here, here, and here.  The spreadsheets, provided to me by the county's budget and finance department, highlight the areas where we exempt taxes;  County, Library MSBU, and the Sheriff's MSTU.  In the header of the vertical columns, you will see the value of the  subject property to be exempted, expressed in three ways:

1.   Market Value of the Property
2.   Assessed Value of the Property
3.  The Amount of the total Assessed Value that will be Exempted via the EDATE

At the far right, the value of the exemption received is listed, and at the bottom of the sheet the grand total of all exemptions is listed.  For the four years I have included, the average yearly total of these exemptions given (which equates to the unrealized tax revenue)-is roughly $1.7 Million Annually.

Some things to consider when looking at EDATES as an economic development tool:

1.  The period of the incentive is capped at 10 years, after which time full tax is paid on full taxable value of real property.
2.  There is a ying and a yang to these agreements; something is given by the county, and for that something is given by the entity receiving the EDATE (additional jobs commitments usually)
3.  The local School Board receives full tax revenue on the full taxable value of properties that the County provides EDATES to, from day one of the agreement (school taxes cannot be diminished via EDATES under statute, and neither can the Fire MSBU)
4.  The county does not have to give EDATE exemptions on the full amount of the taxable value of a property; the BCC can give an exemption on a portion of the value and collect taxes on the rest--and this happens frequently.

Look over the list of recipients on the spreadsheets I have linked.  These are good companies, that pay good wages and support thousands of jobs locally!

When IP received their EDATE in May of 2008 (before any current member of the BCC was on the board)--it was given in exchange for a massive expansion of their production and an investment of over $200 Million dollars to their plant.  It was supported unanimously at the time, and signed by my predecessor's predecessor, Mike Whitehead, then chairman of the board and D1 Commissioner.  It did give IP an exemption of roughly $1.6 Million yearly for 10 years.  And this exemption has expired as of 1/1/2018.  With IP supporting 500 personnel and 100 contractor personnel and having an economic impact in our area that is calculated to be $250 Million annually over the last ten years--I believe what the BCC did in 2008 was a good move----especially given the dire circumstances nationally that were occurring at that time....Someone should wake up and remind the local media personalities about the great recession of 2008 that served as a backdrop to this BCC decision of 2008, and tell them it's easy to play Monday morning quarterback but not easy to make tough decisions in real time--and this is what distinguishes the "doers"  (us) from the "pundits" and "gadflys" and "critics" (them).

EDATEs--Good for our Economy, Part I

Fake News Media locally is now attacking EDATES.  They are so ravenous in their new attack they have overlooked the fact that several of us on the dias didn't even vote for these--we inherited them.  Fake News.

Reading some of the garbage in the news lately can bring on a migraine style Excedrin Headache fast.  I mean really fast.

Because a lot of it is garbage, pure rubbish. 

Much of it is opinion blended with half truth, spiced with innuendo, and topped off with ad hominem attacks.  Pertinent facts are left out, lies are inserted, other issues are hyper-exaggerated, and the overall goal becomes to enrage the reader--not inform the reader.

At it's core, it is nothing more than opinions paraded as news designed to stir up animosity toward "some" elected officials. 

Local print media has changed and evolved, and it is now all about "hits" and "clicks" and "shares" and other statistics that lead and compel writers to stir division, stoke anger, push boundaries and run up the click counts--hoping for the next big "viral" story.  This is also how the writers are compensated in many instances--it becomes a glorified "popularity contest."

Good news stories by and large do not stir big numbers, and this leaves attack pieces and contrived controversies to carry the slack.

A recently departed PNJ reporter, who actually wrote really well and put out good stories, is no longer there because the pieces written by this individual, according to someone with whom I spoke who is very familiar, just did not stir up enough clicks. 

So now the focus is not on who, what, when, and where--it is  "Let's Get Salacious and Controversial!!!---Let's Get CLICKS!!" 

Take for instance this tripe about EDATES for area employers.  Somehow, this is now twisted into some kind of a bad thing for our area and economy.  This is an opinion piece, but it infuses some information purported to be factual, and devolves into one messy, sloppy attack piece. 

The target?  County Commissioners like me who support economic development and EDATES.

(EDATE stands for  economic development ad valorem tax exemption.  You can read all about them here.  What they are, how they came to be, what they are for, and how they are approved.) 

We have a number of companies that currently receive these incentives, and over the past four years we have exempted an average of $1.6 Million annually from these employers.

And for this, we generate jobs in manufacturing, we incentivize expansion of existing footprints, we get agreements for new equipment to be purchased and put on line locally, and we diversify our jobs base.  These are good, tangible results for the revenue we forego.

In one instance and for one company--we have exempted millions of dollars with EDATES.  We have also paid incentives from a different pot for additional jobs to be added.  With this one company--that total may well approach $50 Million Dollars in incentives.  And for that, we have a company that has invested $1.2 Billion in facility construction locally and employs 8,000 Escambian's currently with an annual payroll of $400 Million Dollars!  So yes, this incentivization pays back for years and decades to come--it pays back in spades.  No mention of this in the Sunday attack piece, though.

International Paper is now targeted because they have received EDATES for equipment purchases.  I am told by a source very familiar that the large investment made by IP may have gone to a different location were it not for a generous EDATE provided by our county a number of years back (before I was elected to this board).  Had that investment gone elsewhere--there is no guarantee the new IP jobs (or the existing jobs) would have stayed in Pensacola.  So now we have IP with 500 employees, 100 Contractor Employees, and a $250 Million Dollar yearly economic impact in our area --and the cartoonist is mad about the less than a Million dollars yearly over the last 20 years that we have exempted for IP.  Do the math for yourself, do not simply buy what the cartoonist wants to feed you in his ill-conceived, slanted, half-truth hatchet pieces.  He is a biased partisan hack, nothing more.

The intelligent strategy, looking at what IP has invested and what they are working to accomplish here in Escambia County-- is to keep their jobs here and work with IP to help them come into compliance with the environmental regulations that are required.   It is simple, it is a no-brainer.  It's what we are doing and IP is following the process to do this and they are in compliance with the law.

More about our EDATES in part II....