Tax breaks OK’d for 3 industries

Published 12:00 am Wednesday, July 8, 2009

Three improvement-related property tax exemptions for the area’s biggest private employers were OK’d by Warren County supervisors Tuesday, with more talks set this morning on a rarely enacted fee-in-lieu for an ethanol plant.

Annually filed by businesses that have upgraded physical plants or added equipment, the exemptions apply to real and/or personal property related to the improvements. The companies were:

• Anderson-Tully, exempted on $8,076,799.54 in real and personal property and machinery related to an upgrade to its North Washington Street facility.

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• LeTourneau Technologies, exempted on $5,751,600 in equipment additions, mainly a press and furnace.

• Cooper Lighting, exempted on $910,530.53 in machinery and building additions.

Also, supervisors agreed to exempt more than $3.6 million in inventory marked for shipment outside Mississippi from the Bunge-Ergon ethanol plant at the Port of Vicksburg. The precise tax liability on the goods is still pending, as two separate values for the inventory were submitted to supervisors, one $97,860 higher than the other. If agreement is reached on the plant’s first desired pre-tax inventory value, $2,667,508 — the lower of the two — the plant will save more than half on county taxes based on the present millage and $67,748.89 in overall taxes paid to the county, city and school district.

A fee-in-lieu of property taxes equal to one-third of ad valorem and taxes paid is still on the table for discussion, supervisors said. Approvals for the substitute tax method must be approved by the Mississippi Development Authority, which dictates no submission deadlines.

“They’re difficult to do,” Board President Richard George said. “Even though there’s no deadline, obviously it has an impact on your rolls.”

Ergon President Les Lampton, one of four executives from the companies who addressed the board, said the company paid $5.289 million in property, use and other taxes in 2008. The ethanol venture paid $17.3 million for corn trucked from farmers in Warren, Hinds, Issaquena, Sharkey, Claiborne and Yazoo counties for use in ethanol sold outside the state — but was unprofitable in its start-up period.

“We lost money. Corn was higher than expected,” Lampton said, adding the petroleum product refining company’s commitment to Vicksburg and Warren County was strong despite the June 23 closure of its fabricating division, SpecFab.

“When you have to go all the way to the North Sea to get what we manufacture here, bring it over and send it back overseas… hopefully we’re a good citizen and we’ll continue to be,” Lampton said, adding the ethanol plant is at 98 percent capacity.

Total taxes paid by the trio of businesses receiving exemptions for improvements varied by size, but each totaled more than $140,000 for major structures. Each weathered a tough economy in 2008, which included job cuts caused by cost-cutting moves by parent companies or plant consolidation.

“Times have been a little tough lately with the oil prices,” said Charlie Jones, controller with LeTourneau’s main division in Longview, Texas.

Houston-based Rowan Companies announced in June work will restart on a previously scuttled 240C class jackup oil drilling rig, to be the third such rig built at the south Warren County facility.

“It gives us a lot of confidence in moving forward at the Vicksburg yard,” Jones said.

Richard Wilkerson, executive vice president of Anderson-Tully, said the company’s expansion, which shut down the Levee Street mill in favor of its North Washington Street facilities, would soften the effects of the national housing market collapse on its furniture and mill work.

“It’s been a tough year for us, but I think what we’re demonstrating here is we’re investing in the future — hopefully another hundred years,” Wilkerson said.

Production of new energy-efficient lighting systems at Cooper’s local plant, particularly an expanded line of outdoor systems for light-emitting diode, or LED, fixtures, represents the company’s commitment to Vicksburg despite “struggling through some economic downturns,” said accounting manager Joe Osborne.

One local resident, Charles Stevens, who ran unsuccessfully for District 4 supervisor in 2003, appeared to speak out against the improvement-related exemptions.

“We have no idea what the three CEOs make,” Stevens said. “It’s time to take into consideration the property owners that are paying taxes.”

Supervisors asked for work force totals from the companies applying for exemptions. According to estimates, employee numbers are about 852 at Ergon, 700 at LeTourneau with unspecified local representation, 300 at Anderson-Tully and 340 at Cooper Lighting.


Contact Danny Barrett Jr. at