Education alliance wants counties to track tax-break deals

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Counties use incentives to lure companies and industry. In 2002, tax break agreements were given on $92 million of property and represented $1.5 billion in investment, according to a report drafted by Columbia economist Harry Miley.

Currently, there is no definitive source of information on the agreements, said Alliance chairman Jennings L. "Sonny" Graves Jr. The Alliance commissioned Miley, who worked with former Gov. Carroll Campbell to write the 1987 law, to do the report.

The law allows counties to offer a business a fee-in-lieu-of property taxes, but it does not require that they disclose details of the agreement, Graves said. Counties can also keep all the fees instead of sharing with other taxing entities such as school and fire districts, he said.

"No one, including the counties, really knows if these businesses are paying what they're supposed to pay," Graves said.

In addition, the criteria for granting the tax breaks need to be re-examined, he said. In the past, a company had to make a capital investment of $85 million to be eligible. Now companies investing as little as $5 million receive tax breaks, he said.

Homeowners are bearing the brunt of the decreased revenue, according to the report. Unlike other tax issues, "there is no vigorous debate" involving taxpayers before these agreements are made, Graves said. Other taxing entities in the county should also get advance notice, he said.

Although Greenville's County Council has done a good job of sharing, its incentive agreements have cost the school district $600,000 a year since 1996, he said. The money would have equaled 14 teachers.

Because the school district has raised taxes every year since 1998 and the county has not raised taxes since 1996, it's difficult to determine the dollar amount the system receives.

State Rep. Lewis Vaughn, chairman of the Legislative Delegation, said he doesn't want to hinder the counties' ability to recruit businesses.

"But they don't have the right to negotiate away other taxing entities' rights," he said.

Ishmael Tate can be reached at 298-4020.