Jackson Free Press

Four businesses will save $1 million in property taxes on expansions they made to properties in the city of Jackson last year. The Jackson City Council voted during its Dec. 14 meeting to approve resolutions supporting property-tax exemptions for the businesses.

The businesses include: utility company Entergy Services Inc., which expanded the square footage of its operations center and its data processing center near Interstate 220; Hesselbein Tire Company, which expanded the size of its Jackson warehouse; Eaton Aerospace, which expanded its facility; and Metal Processors Inc., after it expanded its scrap-metal recycling and processing plant.

The exemptions, which last no more than five years, means the city will accrue no revenue on the extra square footage the businesses added.

The city bases property taxes on square footage. Increase your square footage, and you likely increase your property taxes. This is one reason some city residents do not report additions to their homes, like the late Mayor Frank Melton, who did not inform the city for years after adding a large addition including an indoor pool and home theater to his north Jackson home.

All in all, the business exemptions will cost the city about $1 million over five years.

Ward 6 Councilman Tony Yarber voted in favor of the tax exemptions, but said he had reservations about the financial loss.

"I am nervous about them, but it speaks to the times that we're in," Yarber said. "I'm not happy with the revenue loss, but we've got to hold on to the jobs we have. It's a necessary trade-off.

The city is facing massive drops in sales revenue in the next five years. Jackson managed to cover a projected $9 million short-term deficit by restructuring its bond debt in a scheme that could require an additional $5 million in annual debt payments by 2014.

"This is the city's way of encouraging development and people to make investments in the city of Jackson," Jackson Planning Director Corinne Fox said. "Entergy, for instance, has invested so much money into improvements on that center, and the exemption is just on the improvement, the additions. They're still paying taxes on the original amount."

Fox added that the city does not exempt the businesses from tax increases connected to the city's fire and police departments, among other things.

Former Ward 6 Councilman and mayoral candidate Marshand Crisler said last week that he is still anxious over generous property-tax exemptions. Crisler, now the district director of the adult education department at Hinds Community College, spoke out against tax and fee exemptions for major downtown development in 2007, including Parkway Properties' $50 million Pinnacle development.

The city agreed to waive one-time building, construction and utility connection fees for the project through an ordinance change that would waive fees to any development costing more than $50 million. Parkway Properties Chief Executive Officer Steve Rogers said the one-time waiver for Pinnacle would cost the city a little more than $100,000, but Crisler worried then that this sacrifice, when combined with nearby construction of the King Edward, Standard Life and Convention Center developments, could cost the city up to $1 million.

Fox said the city had no standard code for tax exemptions that determines the value of a tax exemption versus the number of new jobs created, but Crisler said last week that the city should look into creating one.

"I'm advocating for a standard code, that the city should benefit from X number of jobs in order to get X number of exemptions, and we should have commitments from these businesses to remain within the city after their exemption period expires," Crisler said, and then pointed bitterly to the relocation of a Home Depot, near Highway 18 in south Jackson, just months after its tax exempt status evaporated.

"I'm still thinking about that Home Depot," he said last week. "I wasn't too pleased about that. The previous council approved the 10-year deal. That was right before I got on that they inked it, but we had to go back and do some type of revision because it came up in several council meetings. One part of the dialogue was what was going to happen after the exemption is over. Next thing you know, they packed up and left,"

Flowood Mayor Gary Rhoads said his city rarely offered tax exemptions to new businesses moving into the area.

"We don't give too many tax exemptions for new businesses. We've offered tax increment financing to help developers build out infrastructure on some of the shopping centers in our area, but as far as somebody coming over here and starting up a printing shop, no, we don't do things like that," Rhoads said.

Rhoads said the city offered a tax exemption to Nucor Steel almost 10 years ago on square-footage expansions the company made.

"We just renewed the last two years of their 10-year (exemption) because they came in years ago and did a $70 million expansion to the steel industry over there, but that's the only one we ever did as far as tax exemptions."