How it started
In
June of this year local officials met with representatives of the
Louisiana
Department of Economic Development to discuss the possibility of a
major
employer locating its first manufacturing facility in Ouachita Parish.
The
State officials had offered an incentive package of $67 million to
attract
V-Vehicle to the former Guide Lamp building in Monroe.
However, an additional $15 million was
needed to gain the company's commitment, and local leaders were given a
72 hour
deadline to agree to provide the funds. Following commitments of $2.5
million
in funding by the OEDC and I-20 Development Board, the Monroe City
Council,
West Monroe Board of Aldermen, and the Ouachita Parish Police Jury
agreed to
provide the remaining $12.5 million in funds by March, 2010.
How will the money be raised?
In
considering how the money was to be raised, the local governing bodies
considered a sales tax. However, state law would have required
legislative approval to put a sales tax increase on the ballot, and the
timing of the commitment would not allow that. A property tax election
was the best option available. The 1.8 mill tax election will be held
on October 17th. Local funds for the project will be paid only after
all state funds have already been committed, after the required
investments by the V-Vehicle company have been made, and only after all
additional requirements by V-Vehicle have been met. If the V-Vehicle
company has not met the requirements established by the State prior to
the time the local money is called for, the revenue raised by the tax
will be refunded directly to the taxpayers. The tax proposition is for
15 years, but projections show that tax receipts should retire the
bonds much sooner, possibly within 9 years. At the time the bonds are
paid off the tax will go off the books. The revenue from this tax
cannot be used for any other purpose.
What will V-Vehicle bring to our area?
V-Vehicle
will spend substantial amounts in our local economy. Estimates are that
V-Vehicle will spend tens of millions on local engineering and
professional fees as a part of their $250+ million investment in the
plant and equipment, with over $80 million to be spent on the
construction phase alone. It is anticipated that 500 temporary
construction jobs will be created. When the company goes into full
production in 2012 the estimates are for 1,400 direct jobs in the
plant, and an additional 1,800 indirect jobs. Average wages for the
direct jobs are projected to be $40,000, plus benefits. V-Vehicle will
expand the existing Guide facility from 425,000 square feet to more
than 800,000 square feet. An economic impact study of the V-Vehicle
project by Professor Dek Terrell of LSU, Baton Rouge, which was
commissioned by the Louisiana Department of Economic Development, is
available at the website shown below.
How much will this tax cost local taxpayers?
Residential Property
with Homestead Exemption
| Fair Market Value | Proposed 1.8 Mill |
|---|---|
| up to $75,000 | $0.00 |
| $100,000 | $4.50 |
| $150,000 | $13.50 |
| $175,000 | $18.00 |
| $200,000 | $22.50 |
| $250,000 | $31.50 |
Residential Property
Not Homestead Exempt
| Fair Market Value | Proposed 1.8 Mill |
|---|---|
| $50,000 | $9.00 |
| $75,000 | $13.50 |
| $100,000 | $18.00 |
| $150,000 | $27.00 |
| $200,000 | $36.00 |
| Residential
property is assessed at 10% of fair market value. The 1.8 mills would be $1.80 for every $1,000 of taxable assessed value. |
|
Commercial Property
The
level of assessment for commercial structures is higher (15% of fair
market value [FMV]) than for residential structures (10% of
FMV).
The commercial land is assessed at 10%. In some cases the
commercial land is worth more than the structure affecting the total
assessed value and visa versa. Two commercial properties can
have
the same FMV but different assessments depending on land and building
values. The assessed value times the millage rate equals the
tax
dollars.
For example:
Three commercial properties each with a FMV of $500,000 but different assessed values.
| Description | Amount | Assessed Percent | Assessed Value |
|---|---|---|---|
| Land Value | $150,000 | 10% | $15,000 |
| Structure Value | $350,000 | 15% | $52,500 |
| Total Fair Market Value | $500,000 | ||
| Total
Assessed Value |
$67,500 | ||
| Proposed
1.8 mill tax |
$121.50 | ||
| Description | Amount | Assessed Percent | Assessed Value |
|---|---|---|---|
| Land Value | $250,000 | 10% | $25,000 |
| Structure Value | $250,000 | 15% | $37,500 |
| Total Fair Market Value | $500,000 | ||
| Total
Assessed Value |
$62,500 | ||
| Proposed
1.8 mill tax |
$112.50 | ||
| Description | Amount | Assessed Percent | Assessed Value |
|---|---|---|---|
| Land Value | $350,000 | 10% | $35,000 |
| Structure Value | $150,000 | 15% | $22,500 |
| Total Fair Market Value | $500,000 | ||
| Total
Assessed Value |
$57,500 | ||
| Proposed
1.8 mill tax |
$103.50 | ||
Publications
The link below is the LSU economist's study of Project Liberty and the V-Vehicle article from the LED publication. |
The
link below is to the feature story from EQ, Louisiana Economic
Quarterly, Q2 2009. |