When the calendar flipped on Jan. 1, Rome and Floyd County got some good news and some bad news from the Georgia Department of Economic Development.
The bad news is that Floyd County dropped from a Tier Three community to a Tier Two community — which are thought to need more incentives to help promote growth.
The good news is that incentives offered by the state for businesses locally have been increased. Tier Three communities are able to offer a $1,250 job tax credit per net new job, the Tier Two communities can pay up to $2,500 per job.
Companies need to provide at least 10 net new jobs to be eligible for the job tax credits in a Tier Two county.
The state divides all 159 counties across Georgia into one of the four tiers every year. Factors that are considered include unemployment, poverty level, per capita income and that type of information.
“They reserve a certain number to go into Tier One status, then they go up the scale and rank them all the way up to Tier Four — with Tier Four being the most affluent counties,” said Missy Kendrick, president of the Rome-Floyd County Development Authority. “The purpose of that is to incentivize development in the counties that need it the most.”
Counties that cooperate with one another by forming joint development organizations, such as the Floyd-Gordon Development Authority, also are allowed to offer an additional $500 job tax credit. Kendrick said there aren’t half a dozen counties in the state that are not members of a joint agreement.
“We want to work together for economic development and get that extra $500 job tax credit to provide to our folks who are creating jobs in the community,” Kendrick said. “It has absolutely worked well in terms of getting counties to work together.”
How effective the tier system has been is a tougher question to answer.
Kendrick has worked in Tier One, Two and Three counties. She said that, if nothing else, the system has worked well for existing employers who are able to use those job tax credits to offset their payroll withholding taxes.
“That’s like cash money. It’s money that a company withholds from payroll and, instead of sending it in to the state, they get to use it for economic development purposes, capital investment, that sort of thing,” Kendrick said.
Development Authority Project Manager Heather Seckman compared the tier system to participating in a national conference of site selection consultants.
“You don’t know if taking a trip to Chicago was the reason you landed a company. It’s hard to put your finger on,” Seckman said.
Incentives are important and are included in location decisions, Kendrick said, but they are not the reason a company locates somewhere.
“Most incentives come upfront and are short term. A company is looking for a place they can be successful in for the long term,” Kendrick said. “At that point, when all things are equal, that’s when incentives might come into play. If they can offset some of the risk, then absolutely that’s going to put your community above another community.”
Chattooga County is a Tier One county. Companies need only create two net new jobs to be eligible for a $3,500 job tax credit. Polk, Walker and Whitfield counties join Floyd as Tier Two counties, while Gordon and Bartow counties are Tier Three counties.
Rome and Floyd County also lost three Less Developed Census Tracts at the start of the year — which also has implications for incentives available for industries.
The primary benefit is that, while the county is designated Tier Two, companies in a LDCT are eligible for the highest Tier One job tax credit incentives.
One of the local tracts no longer eligible is on Technology Parkway, another is going up U.S. 27 North, and the third is in the extreme southeastern section of the county.
The good news, according Kendrick, is that Rome and Floyd County still have 10 LDCTs — including the property in the northeast section of the county where the Lowe’s Regional Distribution Center and the 110-acre North Floyd Rail site are located.
Kendrick said companies that are receiving incentives on the three tracts that were upgraded can file paperwork to retain the higher incentive package for one additional year.
The state is in the process of conducting a study to see exactly how many companies are taking advantage of its job tax credits.
The Rome-Floyd County Development Authority is also in the process of reviewing the local incentive package.
“We’re doing a fiscal impact analysis,” Kendrick said. “We’re looking at all of the factors to make sure that what we offer provides benefit to us as well as the company.”
Meanwhile, nearly half a year into her post as president of the development authority, Kendrick said the lack of facilities — existing buildings, primarily — is one of the biggest challenges to the industrial recruitment effort.
The only industrial land the county currently has as a Georgia Ready for Accelerated Development site is the 110-acre North Floyd Rail site at the intersection of Ga. 53 and Ga. 140.
“We need to plan for the future and that’s what we’re doing now,” Kendrick said.
She said most large industries would prefer to be in an “industrial park” for a number of reasons. There’s typically already infrastructure — from water and sewer to gas and power as well as roads — and the land is already zoned for industrial use. They’ll also be adjacent to similar operations and won’t have complaints from their neighbors about not wanting some big industry next to them.
Kendrick told members of the RFCDA last week that her office has 33 active projects on the books at this time.