IDA Cost and Benefit

The IDA currently consists of eight members and one paid director:

IDA Members that serve without direct compensation:
Gene Hardwick (County Commissioner)
Kenneth D. Roberts (City manager Barnesville)
Bruce Akins (Banking and business)
Phillip Bell (Insurance)
Walter Geiger (local Newspaper owner who reports on local government and the IDA)
Raleigh Henry
Jimmy Lyons
Dr. Larry Weill (Gordon College)

IDA Director (directly compensated):

Missy Kendrick

IDA Finances

The IDA, when scaled to the number of full-time paid employees, has by far the highest employee wage rate in this area. The average wage of IDA full-time employees is $72,500 per employee.

The IDA currently holds around 435 acres of prime commercial land, much of which is within the city limits of Barnesville. This property is on the tax records of having a value of $18,895,000.00

Property is taxed at a rate of approximately 25 mils in the county, and about 5.3 additional mils for a total of 29.3 mils in the City. The county's share is always 25 mils, or whatever the current county millage rate is.

Georgia uses a system of Ad valorem taxes. Property is taxed at 40% of the actual value using the millage rate. A mil means one thousandth, so 25 mils is 25/1000 or 2.5%.

If we look at the total property held by the IDA, the county's tax share would calculate:

$18,895,000.00 times .40 (40 percent) = $7,558,000.00

$7,558,000.00 times .025 (2.5%)= $188,950.00

The IDA pays no taxes. Anything they own is tax exempt. This is why they issue bonds and own equipment, buildings, and property. They then lease this property back to a business, and the business pays no tax on the portion the IDA owns (since they are leasing from the IDA and technically do not own the equipment and property they use). While regular citizens are paying ever increasing taxes on our houses, cars, boats, and land the IDA is busy exempting businesses from tax.

The IDA effectively removes $190,000 from the tax digest.

Before the IDA makes the county a dime in increased revenues, it has to bring us about $200,000 of additional tax money that would not be here without the IDA's help, plus other operating costs.

IDA Cost to Taxpayers

We think credit due should go where it is most deserved. The Commissioner pushing hardest for the IDA and increases of  IDA funding is Gene Hardwick. This includes increasing the salary of one of the highest paid local Government employees.

The IDA likely costs taxpayers around $400,000 dollars per year. It withholds property from the tax digest, and it has some pretty hefty operating expenses.

Property withheld from our tax base is worth around $19 MILLION dollars. If the IDA didn't own it, someone would be paying tax on it at a rate of 40% times about 2.5% per year (or more). Traditional IDA exemptions exclude the school system, it is all part of our tax structure.

2008 IDA expenses and proposed 2009 expenses are listed as:

The IDA, with one person earning $72,500 plus benefits and expenses and a total payroll of $91,800, has what appears to be the highest paid employee in the county. We certainly can't find anyone making more money in Lamar County Government (not even the County Manager), but would be happy to correct this if we are wrong.

Now we are not against earning money or rewarding people for a good return on investment, but facts are facts. If we took that $400,000 from lost taxes and expenses from the IDA and just gave it to people picking up trash in Lamar County, we could employ 20 people at $20,000 per year. If those same people were on welfare we could remove them from the welfare rolls and pocket $280,000 in welfare savings and have a cleaner county. We would gain 20 jobs that make Lamar County a cleaner place to live, all for a net spending (after welfare savings) of $120,000.

This is why it is almost always a bad idea to have Government involved in business. It generally winds up being taxpayer funded business profits.

IDA Spin

What we hear from the IDA doesn't often seem to be the truth. The July 1, 2008 edition of The Herald-Gazette claimed the following:

There are seven businesses claimed to have been brought here since 2005:

1.) Aviation Inventory Repair (not here yet)

2.) D-Check Developments, Inc (not here yet) link to website

3.) General Protecht (no site work started yet, full tax abatement promised)

4.) Greenco (no local information listed yet, maximum of eight employees planned) link to story

5.) Piedmont Green Power (incinerator for wood power, not started yet) link to article

6.) Southern Textiles (storage space rental for material storage only, no employees planned, created zero jobs)

7.) Standard Door (left, zero employees, zero taxes paid)

The IDA clearly thinks a business with zero employees and no planned employees constitutes an "addition to our industrial base". The truth is, out of the seven businesses claimed to have been added since 2005, there have been virtually no local employees added at this time. This is at a cost of $400,000 a year to taxpayers. We've effectively paid around $1,000,000.00 to add, at best, a few full-time jobs in Lamar County.

Let's look at one of the businesses claimed to have been brought to Lamar County. It will reveal how we have to watch everything the IDA says.

One of the seven companies named in the Herald-Gazette as "announcing their intent to locate and do business in Lamar County" is Southern Textiles.

Southern Textiles was never brought to Lamar County by the IDA. Southern Textiles was converting some domestic manufacturing and purchases to Chinese Imports. They needed space for overseas containers arriving from China. This actually represents a job loss for the USA, not a job gain.

An employee of Southern Textiles suggested they look into the former Carter's facility, a local plant that closed as jobs were shipped overseas, to use as a holding area for finished goods coming from overseas. There was never any intent to add jobs to Lamar County. The existing staff in Forsyth is more than able to handle the arrival of overseas containers of foreign manufactured goods.

The "business" done in Lamar County is simply a place to unload and store finished goods from China that displace American workers.

If this is a success story, a little more success and none of us will have jobs (except in the Government).

Click HERE to see another case of IDA Spin.

Other Companies Sponsored by the IDA

One of the claims of the IDA is they work to increase our tax base. How much tax do we get from businesses that intermingle with the IDA?

Jordon Lumber Taxes Paid

Note: Before the IDA got involved the Jordon operation was paying hundreds of thousands of dollars tax per year.

Enercon

B&G Plastics

Note: The property and equipment at B&G Plastics is probably worth a few million dollars. A typical homeowner with a $200,000 house without homestead exemption would pay $2,000 in property taxes. Contrast that to the taxes paid by companies with millions of dollars of property and equipment assets.

Of three major working operations in Lamar County, the total taxes for three years are $78,342.00

If we take all three major businesses, the total tax revenue for three years is not enough to pay the IDA director for one year! It would actually be cheaper to disband the IDA and just let businesses operate tax free, or throw them all out.