8/21/2008 5:02:00 AM County nixes tax deal with Nissan
By STEVEN G. WATSON Associate Editor
The county won't honor a tax agreement made with Nissan seven years ago allowing for accelerated depreciation of its machinery.
Explaining that the tax revenue generated by the Nissan Automotive Plant is not meeting estimates made eight years ago, Tax Assessor Gerald Barber recommended that supervisors not honor the agreement and instead tax the company using a more standard depreciation scale.
Nissan representatives were on hand to protest the move saying that the agreement with the county was laid out in a Memorandum of Understanding (MOU) before they decided to locate near Canton in 2001 and should be honored.
Barber explained that the county is still paying off a bond used in an incentive package for Nissan and that under the agreement taxpayers may end up being responsible for the difference.
"We took out a bond for improvements based on a number we expected from Nissan," Barber said. "This was so it wouldn't cost taxpayers anything to bring them into the county."
Barber estimates that the county is paying $1.67 million on debt related to the Nissan incentives each year and in 2007 taxes for the plant brought in $1.64 million.
"This is all about the money," he said. "It's always about the money."
Nissan Attorney Alveno Castilla agreed with Barber that it "was about the money," but argued that didn't change the fact that the assessment value he proposed was wrong.
"I agree that this assessment does seem to be all about the money, but it shouldn't be about the money," Castilla said. "This assessment should not be based on a bond payment, it should be based on true value.
"We see no reason to change our original agreement," he continued. "Nothing has changed to take away from the spirit of that agreement."
Nissan's initial argument that got the county to agree to the tax adjustment, was that its machinery - which is taxed based on assessed value - would depreciate more rapidly since it would be used more frequently across multiple work shifts.
Barber said that may have been the case initially, but a decrease in shifts changes the equation (Nissan is currently working only two shifts).
He also said Nissan has failed to respond to several requests for information on upgrades or re-tooling of the machines. Something Barber said would increase their assessed value.
Nissan contests that their machines have required no such upgrades or re-tooling.
Also, noted was the effect the decrease in tax revenues would have on the Canton School District, which projected as much as $1.9 million in revenues back in 2000, but have seen that number decrease to $1.6 million this year.
School Board Attorney John Christopher addressed the board saying the district has also committed to various improvements like a new school and new infrastructure based on the projected revenue stream Nissan would bring.
District 5 Supervisor Paul Griffin said he supported Nissan and understood their position, but that his first responsibility was to the citizens of Madison County.
District 4 Supervisor Karl Banks then made the motion to accept the new tax assessment as presented by Barber, which was approved unanimously 5-0 by the board.
