The most disturbing aspect of negotiations between the city and Bass Pro Shops, which is considering locating in the Decatur-annexed portion of Limestone County, is that a penny in sales taxes historically contributed to schools is on the table.
It’s time for the City Council to consider designating the penny to Decatur City Schools, a move that would protect the funding from recruitment incentives.
For three decades, the City Council has given a portion of the sales tax it collects to Decatur City Schools. The practice is a recognition that Decatur’s success is bound to the success of its schools. Recruitment of industry and residents depends on a solid K-12 program, as does residential housing. Providing resources to the school system improves its ability to provide opportunity for students and to provide a talented workforce for local employers.
DCS routinely loses the penny when manufacturers locate in Decatur. Economic development officials explain that the exact amount of tax abatements rarely is a deciding factor for incoming industries. A potential deal killer, however, arises if those officials offer a smaller incentive package than the law allows.
It’s understandably difficult for economic officials to promise complete support for a manufacturer, but then refuse to abate taxes the law allows them to waive. Increasingly, industries can choose locations anywhere in the world. If they perceive Decatur wants them less than other cities, the odds are good they will strike the city from a long list of potential sites.
In the case of manufacturers, the schools’ loss of a penny was significant but manageable because the sales-tax loss mainly affects purchases made during construction.
The Bass Pro negotiations suggest retailers now demand the same tax concessions long limited to industry. The potential loss in school funding, however, is much more significant. Retail revenue comes from sales, and every dollar the retailer brings in adds a penny to the school system’s budget.
State law prevents abatements of taxes designated for education. A simple ordinance by the City Council, designating the penny for DCS, would have no impact on the city budget. It merely would formalize the long-standing tradition. What such an ordinance would do is take the penny off the table in future negotiations.
The door was left open for Bass Pro, and that’s probably just as well. Decatur annexed the Limestone County property a quarter-century ago, and it generates almost no sales-tax revenue for the school system. The $12 million abatement of taxes that traditionally would go to DCS is not much of a sacrifice, since without Bass Pro the school system is unlikely to enjoy any sales-tax revenue from the agricultural land.
Now that the City Council has demonstrated its willingness to consider abating the penny, however, it can expect all future retailers in the Sweetwater development to seek the same concession.
The simple solution is to close the door after Bass Pro slides through. By designating the penny for DCS, the City Council can take it off the table in future negotiations.
The no-cost result will be better-funded schools, which benefit both Decatur residents and the businesses that locate here.
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Exactly right.
The Counsel must act quickly and accept this wonderful opportunity before it is lost. We need this NOW. No delays. No reviews.
I'm with Dave.
DD has an obvious issue with this deal, wonder what's at the root of it?
Taking money away from schools and existing small business. This is a one sided deal. We are giving away too much. We are paying 2.5 million dollars and then giving the property away so we can pay even more. Ridiculous. But because a few old money, land rich important Decatur families want it, the mayor and council jump.
Too many tax incentives will ultimately result in a one cent sales taxes increase.
whine, whine, whine...