May 11, 2016
Unbelievable! When did the JDA meet and decide to help out that poor little international company worth billions that wants more tax incentives? How many years have we been told that “Baxter” and Stanton Springs is going to pay off by 2018?
Just a couple of months ago the Commissioners in each of the 4 counties voted to make the taxpayers of each county responsible for the $1.3M of debt JDA was going to default on. Additionally they also approved another line of credit for $600,000 and 5% interest on all this. Baxter’s tax revenue was going to help pay for this debt, and the taxpayers would not see any benefit for a few more years (5, 6, 7 years more?).
If the geniuses on the JDA approve more tax incentives, and more bonds according to the article, when if ever will the taxpayers of the 4 counties see any benefit to this project? The lawyers are making plenty of money, and the multi-billion dollar company is keeping more money for itself. The taxpayers just keep shelling out more and more and never see any of those great benefits we hear about!
Read the article for yourself!
Joint Development Authority studies additional tax abatements for Baxalta
- By Alice Queen
Updated 12 hrs ago May 11, 2016
COVINGTON — Members of the Joint Development Authority at Stanton Springs are in discussions with Baxalta in response to a request by the biopharma giant for consideration of additional tax abatements.
“It’s really just conversation at this point,” said Andrea Gray, attorney for the Joint Development Authority of Jasper, Morgan, Newton and Walton counties. “Baxalta realized that they would be making a greater investment in the Stanton Springs community, and they are internally trying to figure out how much that is going to be.”
Newton County District 5 Commissioner Levie Maddox, who is the county’s representative on the JDA, said the authority is gathering information about the potential benefits to the four counties, but that no decision will be made without a “full evaluation of the facts and in a duly noticed public meeting.”
“The Joint Development Authority understands Baxalta’s completion of the Stanton Springs facility will result in additional investment that will have a positive impact on tax revenues for the four counties,” Maddox said in an email Tuesday. “Tax abatements for any additional investment, if justified by substantial public benefits, would have to be approved through the issuance of bonds. The Joint Development Authority requested Baxalta provide information regarding the specific nature and extent of the additional investment and a current accounting of its real and personal propertry.”
The four counties that make up the JDA agreed in 2012 to abate taxes on personal and real property at Baxalta for 10 years as part of an inducement for the plant to locate in Stanton Springs. The abatements were based on a projected investment by the company of $1.137 billion and creation of more than 1,400 jobs. The abatement percentages vary by year and property type — real or personal. The abatements do not begin until Baxalta is certified for operation by the FDA or Jan. 1, 2020, whichever occurs first. Officials have said Baxalta could gain certification as early as 2018.
Gray said it is not clear when Baxalta will provide the requested information on its additional investment as the company is finalizing a merger with Shire, a specialty biopharmaceutical manufacturer based in Ireland. She said the structure of any additional abatements, if approved, would depend on the amount of the additional investment and the number of additional jobs created.
Tax abatements are typically used to induce a project to come to a community and are achieved through the issuance of “phantom bonds.” The process involves a government entity taking title to the project, then issuing bonds and leasing the project back to the developer, in this case Baxalta. The developer then would pay rent to the governing entity, and those funds would be used to pay debt service and repay the bonds. The title transfer and “phantom bond” process are necessary because taxes cannot be abated on private property.
Since Baxalta has already located in Stanton Springs, Gray said it was unclear what the advantage would be in expanding tax abatements on the project, but she said the JDA would continue to gather information for consideration.
Tommy Knight, tax assessor in Walton County where Baxalta is located, said it is not yet known if Baxalta’s investment at Stanton Springs has exceeded its original abatement amount, and the company is “not taxable on any digest” at this point. Knight said it is also important to consider that much of what was spent in development of the project would be considered “intangible” and would not be taxable as property.
BE ALERT! BE INFORMED!!