Spartanburg County Promotes Economic Growth Amid FILOT Debate

News Summary

Spartanburg County is poised for economic growth as leaders discuss fee-in-lieu-of-tax (FILOT) agreements. These contracts incentivize substantial company investments, helping boost local employment. However, critics argue they favor large corporations at the expense of smaller businesses. With ongoing negotiations for significant investments from Volvo Car USA and Michelin, the future of FILOT agreements remains uncertain. Community discussions are focused on finding a balance that supports both job creation and local business fairness.

Spartanburg County Steps Up to Promote Economic Growth Amid Fee-in-Lieu-of-Tax Debate

Spartanburg County is brimming with opportunities as its leaders gather on January 22, 2024, to discuss the situation surrounding fee-in-lieu-of-tax (FILOT) agreements. These agreements have been pivotal in attracting companies, promising tax breaks in exchange for substantial investments and job creation. On a sunny day, with a delightful high of 49°F and a low of 28°F, the atmosphere is perfect for discussing these crucial agreements.

Revving Up the Local Economy

It might surprise some, but FILOT agreements are not new to Spartanburg County. In fact, they played a significant role in bringing global giants like BMW to the area, helping rejuvenate a local economy that took a hit after the textile industry faced its decline. Thanks to these incentives, a whopping 11,000 workers are proudly employed at BMW Manufacturing in Spartanburg County. It seems those FILOT agreements have proven their worth, wouldn’t you say?

So, what exactly are these FILOT arrangements? In simple terms, they are contracts between a county and a company that invests a minimum of $2.5 million. These contracts allow firms to negotiate a reduced property tax rate by lowering the assessment ratio from the standard 10.5% to as low as 6% for most manufacturers, and even 4% for large investments. With the potential duration of these agreements extending up to 30 years, and super FILOTs lasting as much as 40 years, it’s no wonder companies are jumping on board.

Keeping the Balance in Check

However, not everyone is on board with the concept of FILOT agreements. Critics argue that these incentives create an imbalance between large corporations and smaller local businesses, with big players enjoying significant tax advantages compared to the flat rate paid by the smaller companies. This discontent has led to accusations that FILOTs equate to corporate welfare, with some community members calling for alternative ways to attract businesses.

In an effort to address these concerns, County Administrator Cole Alverson pointed out that even with the tax breaks, the influx of new companies ultimately contributes significantly more to the tax pool than residential properties. This creates a healthier economy overall, but the debate continues to brew in the community.

Adding to the conversation is Jason DeBacker, an economics professor who raises questions about the more complicated aspects of FILOT agreements potentially complicating the investment landscape. He warns that these complexities might be a deterrent for prospective investors looking to make Spartanburg their next big move.

In the Pipeline: New Investments and Future Projects

On a more optimistic note, recent developments show that the momentum isn’t slowing down. Volvo Car USA has the opportunity to invest a staggering $19.5 million in Spartanburg County, in part due to a FILOT arrangement that offers them a reduced property tax rate of 6%. Additionally, the county is currently negotiating with Michelin for a remarkable $159 million expansion project, which could also be supported by FILOT incentives.

Those advocating for these agreements, including David Britt, assert that without FILOTs, Spartanburg County might struggle to compete for jobs and investments against neighboring regions with more enticing tax policies. Their argument hinges on the idea that these agreements are essential for fostering a business-friendly environment that attracts new players into the scene.

Looking for Solutions

To counterbalance the ongoing concerns about fairness, Britt suggests that uniform property tax rates of 4% for all manufacturers could streamline the tax structure, reducing the reliance on FILOT agreements altogether. This could pave the way for a more equitable playing field for both large and small businesses alike.

As the counties gather, it remains to be seen how Spartanburg County will navigate this tricky landscape, balancing the needs of attracting big investments while ensuring that local businesses feel valued and supported. The coming months will surely reveal how this debate unfolds, but for now, the city continues to buzz with excitement and potential.