Warren County’s nod toward tax incentives for a local industry could translate into a tax increase for local residents, Dr. James Price, superintendent of the Vicksburg Warren School District said Wednesday.

Price said an incentive package approved last week by the Board of Supervisors for Ergon Refining Inc., could cause the school district to lose nearly $1 million a year in potential revenue for the next 10 years, possibly forcing the district to raise taxes to support its growth.

&#8220This is money the district is going to need as we expand and need more money every year,” he said.

Mississippi empowers local governments to extend a variety of tax breaks to manufacturing sector employers who are expanding or locating. In the past, most have still required full payment of taxes due for the support of public education.

Ergon, which operates a refinery at the E.W. Haining Industrial Center, sought and received the board’s approval of a 10-year payment-in-lieu of ad valorem and property taxes amounting to one-third of the tax levy, including school taxes, provided the company’s plant expansion reaches $100 million.

The plans for Ergon’s expansion should total $113 million, the company said, and include purchasing new equipment for the future production of ethanol, providing about 11 new jobs and adding $665,000 to the company’s payroll.

Price said according to his understanding, the payment-in-lieu of taxes agreement alone could mean more than $400,000 in lost revenue.

The district serves 9,200 students and is operating on a $73 million budget. Of that, 50.1 percent comes from a state allocation and 34.6 percent from local property taxes. The rest comes from federal sources and 16th Section land.

Ergon also asked for breaks concerning its planned joint venture with Bunge North American Inc. to build an ethanol plant in Vicksburg by late 2007. According to officials, when completed the plant will employ 32 people with an annual payroll of $2 million.

&#8220For that development, the agreement also granted no raw materials tax, no work-in-progress tax and free port warehouse status. I don’t even know what the value of all of that is,” Price said.

Although District 4 Supervisor Carl Flanders voted no on the second incentive, the agreements were made.

District 5 Supervisor Richard George commented that Ergon’s economic impact &#8220means a lot in this community” and represents a known commodity.

Price said he has voiced his concern to one board supervisor and is still trying to understand exactly what it could all mean for the district in the long-run.

&#8220But preliminary research doesn’t look good,” he said.

No local tax increase was included in this year’s VWSD budget. There was an increase of .55 mill to fund the 2005-2006 school year. Before that, there had been no increases for at least 10 years, largely owing to a new revenue stream from casino development.