On the agenda for tomorrow’s meeting of the Henry County Board of Commissioners is a resolution to approve the creation of the Bear Creek Opportunity Zone in Hampton surrounding the airport.
The Georgia Department of Community Affairs describes an Opportunity Zone this way:
The Opportunity Zone designation is a provision under the Job Tax Credit Program, in O.C.G.A. 48-7-40.1(c)(4), which states (emphasis added):
“Any area which is within or adjacent to one or more contiguous census block groups with a poverty rate of 15 percent or greater as determined from data in the most current United States decennial census, where the area is also included within a state enterprise zone pursuant to Chapter 88 of Title 36 or where a redevelopment plan has been adopted pursuant to Chapter 61 of Title 36 and which, in the opinion of the commissioner of community affairs, displays pervasive poverty, underdevelopment, general distress, and blight.”
A reading of the entire legislation (below) authorizing Opportunity Zones seems to make clear that it is intended as a tool to remedy areas suffering from pervasive poverty.
Instead, certain Henry County elected officials are using it to provide tax breaks to some of their campaign donors.
This is illustrated in the Exhibit document that will be presented in tomorrow’s BOC meeting. A table on pages 6 & 7 of that document lists each property parcel in the proposed Opportunity Zone surrounding the airport with an evaluation of the four categories required for an Opportunity Zone: Pervasive Poverty, Underdevelopment, General Distress, and Blight.
None of these properties or their owners suffer from pervasive property, distress, or blight, and the only reason the land is predominantly undeveloped is because that has been their choice until now.
Here is list of those same property parcels which includes information available from the Henry County Tax Assessors website. Nearly all of these property owners are campaign donors to former Henry County Chairman BJ Mathis, State Senator Rick Jeffares, and Congressman Lynn Westmoreland, all of whom were the primary elected officials responsible for the purchase of Tara Field Airport at the county, state, and federal levels respectively.
We knew from the beginning that ousted Commission Chairman BJ Mathis was instrumental in the purchase of the Airport as payback to her donors from Big 5 Enterprises, but she is similarly guilty of crony capitalism with additional property owners, as well.
Campaign contributions BJ Mathis has accepted from Bear Creek Alliance Members, their immediate family members, and business associates since 2008 total $15,350.00
We also knew from the beginning that Congressman Lynn Westmoreland played a crucial role in the purchase of the airport by securing $15 million in funding from the FAA. However, it wasn’t until the Georgia Department of Transportation revealed the airport expansion plans that we discovered his crony capitalism problem. Included in the expansion plan is the purchase of 66 acres adjacent to the airport from one of his biggest (if not the biggest) individual donor.
Campaign contributions Congressman Lynn Westmoreland has accepted from Bear Creek Alliance Members, their immediate family members, and business associates since 2004 total $79,600.00.
Now we find out that State Senator Rick Jeffares also suffers from this same crony capitalism disease. Jeffares was equally influential in the purchase of the airport as noted when Lt. Governor Casey Cagle remarked:
“A comprehensive infrastructure network, including access to airport facilities, is a critical component of any successful economic development strategy,” said Lt. Governor Casey Cagle. “I applaud the Henry County Board of Commissioners for their vision in acquiring this critical component of Henry County’s transportation infrastructure and appreciate Senator Jeffares’ diligent work on this project. Like all of them, I look forward to future economic development successes and job growth as a result of today’s announcement.”
And, according to a recently obtained document which outlines plans for a public-private partnership between some of these land owners and our local, state, and federal governments, it appears the Henry County Water and Sewerage Authority will play significant role as a member of the “Bear Creek Alliance”. In addition to being a State Senator, Rick Jeffares is also a Board Appointee to the HCWSA. It would make sense that he likely has a significant role in the coordination of state departments involved in this plan including, GDOT, DCA, and the Governors office.
Campaign contributions Senator Rick Jeffares accepted from Bear Creek Alliance Members, their immediate family members, and business associates since 2010 total $9,400.00.
This spreadsheet details all these campaign contributions which are public record and available at the Georgia Campaign Finance Commission and the Federal Elections Commission websites.
So, the long and short of this is that, outgoing BOC Chairman BJ Mathis, Senator Rick Jeffares and Congressman Lynn Westmoreland have forced the Henry County taxpayers to spend money we do not have for an airport we did not want. The county laid off 57 employees and our property taxes just went up again in order to pay for it. We’re losing public safety officers to better paying jobs at an alarming rate and there’s still the matter of the $5 million balloon payment we will be required to make in 2017 for the Golf Course.
At the same time, special interest donors who own land around the airport and have made significant campaign contributions to these three elected officials, not only stand to profit from the inevitable development of their properties, but these same elected officials have secured for them cushy tax breaks by creating an Opportunity Zone specifically for them.
Fortunately, tomorrow’s BOC meeting will be BJ Mathis’ last. Good riddance. As for Jeffares and Westmoreland, well, I guess we can expect two more years of paying back their donors.
O.C.G.A. § 48-7-40.1
Copyright 2012 by The State of Georgia
All rights reserved.
*** Current Through the 2012 Regular Session ***
TITLE 48. REVENUE AND TAXATION
CHAPTER 7. INCOME TAXES
ARTICLE 2. IMPOSITION, RATE, AND COMPUTATION; EXEMPTIONS
O.C.G.A. § 48-7-40.1 (2012)
§ 48-7-40.1. Tax credits for business enterprises in less developed areas
(a) As used in this Code section, the term:
(1) “Broadcasting” means the transmission or licensing of audio, video, text, or other programming content to the general public, subscribers, or to third parties via radio, television, cable, satellite, or the Internet or Internet Protocol and includes motion picture and sound recording, editing, production, postproduction, and distribution. “Broadcasting” is limited to establishments classified under the 2007 North American Industry Classification System Codes 515, broadcasting; 519, Internet publishing and broadcasting; 517, telecommunications; and 512, motion picture and sound recording industries.
(2) “Business enterprise” means any business or the headquarters of any such business which is engaged in manufacturing, including, but not limited to, the manufacturing of alternative energy products for use in solar, wind, battery, bioenergy, biofuel, and electric vehicle enterprises, warehousing and distribution, processing, telecommunications, broadcasting, tourism, biomedical manufacturing, and research and development industries. Such term shall not include retail businesses. Businesses are eligible for the tax credit provided by this Code section at an individual establishment of the business based on the classification of the individual establishment under the North American Industry Classification System. For purposes of this Code section, the term “establishment” means an economic unit at a single physical location where business is conducted or where services or industrial operations are performed. If more than one business activity is conducted at the establishment, then only those jobs engaged in the qualifying activity will be eligible for the tax credit provided by this Code section.
(b) Not later than December 31 of each year, using the most current data available from the Department of Labor and the United States Department of Commerce, the commissioner of community affairs shall rank and designate as less developed areas the areas which are comprised of ten or more contiguous census tracts in this state using a combination of the following equally weighted factors:
(1) Highest unemployment rate for the most recent 36 month period;
(2) Lowest per capita income for the most recent 36 month period; and
(3) Highest percentage of residents whose income is below the poverty level according to the most recent data available.
(c) The commissioner of community affairs also shall be authorized to include in the designation provided for in subsection (b) of this Code section:
(1) Any area comprised of ten or more contiguous census tracts which, in the opinion of the commissioner of community affairs, undergoes a sudden and severe period of economic distress caused by the closing of one or more business enterprises located in such area;
(2) Any area comprised of one or more census tracts adjacent to a federal military installation where pervasive poverty is evidenced by a 15 percent poverty rate or greater as reflected in the most recent decennial census;
(3) Any area comprised of one or more contiguous census tracts which, in the opinion of the commissioner of community affairs, is or will be adversely impacted by the loss of one or more jobs, businesses, or residences as a result of an airport expansion, including noise buy-outs, or the closing of a business enterprise which, in the opinion of the commissioner of community affairs, results or will result in a sudden and severe period of economic distress; or
(4) Any area which is within or adjacent to one or more contiguous census block groups with a poverty rate of 15 percent or greater as determined from data in the most current United States decennial census, where the area is also included within a state enterprise zone pursuant to Chapter 88 of Title 36 or where a redevelopment plan has been adopted pursuant to Chapter 61 of Title 36 and which, in the opinion of the commissioner of community affairs, displays pervasive poverty, underdevelopment, general distress, and blight.
No designation made pursuant to this subsection shall operate to displace or remove any other area previously designated as a less developed area. Notwithstanding any provision of this Code section to the contrary, in areas designated as suffering from pervasive poverty under this subsection, job tax credits shall be allowed as provided in this Code section, in addition to business enterprises, to any lawful business.
(d) For business enterprises which plan a significant expansion in their labor forces, the commissioner of community affairs shall prescribe redesignation procedures to ensure that the business enterprises can claim credits in future years without regard to whether or not a particular area is removed from the list of less developed areas.
(e) Business enterprises in areas designated by the commissioner of community affairs as less developed areas shall be allowed a job tax credit for taxes imposed under this article equal to $3,500.00 annually per eligible new full-time employee job for five years beginning with the first taxable year in which the new full-time employee job is created and for the four immediately succeeding taxable years; provided, however, that where the amount of such credit exceeds a business enterprise’s liability for such taxes in a taxable year, the excess may be taken as a credit against such business enterprise’s quarterly or monthly payment under Code Section 48-7-103 but not to exceed in any one taxable year $3,500.00 for each new full-time employee job when aggregated with the credit applied against taxes under this article. Each employee whose employer receives credit against such business enterprise’s quarterly or monthly payment under Code Section 48-7-103 shall receive credit against his or her income tax liability under Code Section 48-7-20 for the corresponding taxable year for the full amount which would be credited against such liability prior to the application of the credit provided for in this subsection. Credits against quarterly or monthly payments under Code Section 48-7-103 and credits against liability under Code Section 48-7-20 established by this subsection shall not constitute income to the taxpayer. The number of new full-time jobs shall be determined by comparing the monthly average number of full-time employees subject to Georgia income tax withholding for the taxable year with the corresponding period of the prior taxable year. Only those business enterprises that increase employment by five or more in a less developed area shall be eligible for the credit; provided, however, that within areas of pervasive poverty as designated under paragraphs (2) and (4) of subsection (c) of this Code section businesses shall only have to increase employment by two or more jobs in order to be eligible for the credit, provided that, if a business only increases employment by two jobs, the persons hired for such jobs shall not be married to one another. The average wage of the new jobs created must be above the average wage of the county that has the lowest wage of any county in the state to qualify as reported in the most recently available annual issue of the Georgia Employment and Wages Averages Report of the Department of Labor. To qualify for a credit under this subsection, the employer must make health insurance coverage available to the employee filling the new full-time job; provided, however, that nothing in this subsection shall be construed to require the employer to pay for all or any part of health insurance coverage for such an employee in order to claim the credit provided for in this subsection if such employer does not pay for all or any part of health insurance coverage for other employees. Credit shall not be allowed during a year if the net employment increase falls below five or two, as applicable. The state revenue commissioner shall adjust the credit allowed each year for net new employment fluctuations above the minimum level of five or two.
(f) Tax credits for five years for the taxes imposed under this article shall be awarded for additional new full-time employee jobs created by business enterprises qualified under subsection (b) or (c) of this Code section. Additional new full-time employee jobs shall be determined by subtracting the highest total employment of the business enterprise during years two through five, or whatever portion of years two through five which has been completed, from the total increased employment. The state revenue commissioner shall adjust the credit allowed in the event of employment fluctuations during the additional five years of credit.
(g) The sale, merger, acquisition, or bankruptcy of any business enterprise shall not create new eligibility in any succeeding business entity, but any unused job tax credit may be transferred and continued by any transferee of the business enterprise. The commissioner of community affairs shall determine whether or not qualifying net increases or decreases have occurred and may require reports, promulgate regulations, and hold hearings as needed for substantiation and qualification.
(h) Any credit claimed under this Code section but not used in any taxable year may be carried forward for ten years from the close of the taxable year in which the qualified jobs were established, subject to forfeiture as provided in subsection (e) of this Code section, but the credit established by this Code section taken in any one taxable year shall be limited to an amount not greater than 100 percent of the taxpayer’s state income tax liability which is attributable to income derived from operations in this state for that taxable year.
(i) Notwithstanding Code Section 48-2-35, any tax credit claimed under this Code section shall be claimed within one year of the earlier of the date the original tax return was filed or the date such return was due as prescribed in subsection (a) of Code Section 48-7-56, including any approved extensions.
(j) Taxpayers that initially claimed the credit under this Code section for any taxable year beginning before January 1, 2012, shall be governed, for purposes of all such credits claimed as well as any credits claimed in subsequent taxable years related to such initial claim, by this Code section as it was in effect for the taxable year in which the taxpayer made such initial claim.
HISTORY: Code 1981, § 48-7-40.1, enacted by Ga. L. 1993, p. 1649, § 2; Ga. L. 1994, p. 928, § 3; Ga. L. 1996, p. 220, §§ 3, 4; Ga. L. 1997, p. 461, § 2; Ga. L. 2000, p. 605, § 2; Ga. L. 2001, p. 984, § 8; Ga. L. 2004, p. 939, § 1; Ga. L. 2008, p. 874, § 2/HB 1246; Ga. L. 2008, p. 1152, § 1/HB 1273; Ga. L. 2009, p. 654, § 2/HB 439; Ga. L. 2012, p. 1309, § 2/HB 868.