Columbia County gets additional job tax credits

Most Georgia communities would consider themselves fortunate to have Columbia County’s affluence – until it’s time to compete for new jobs and industry.

 

That’s when Columbia County’s above-par economic demographics – the fourth best in the state – paradoxically work against it by pushing it to the bottom rung of the state’s four-tier job tax credit program, which gives the highest job-creating incentives to the most economically disadvantaged communities.

For most of Columbia County’s recent history, it has had “tier 4” status, which caps the value of its tax breaks at $1,250 per job, compared to the $4,000 per-job credits that neighboring “tier 1” counties – including Richmond, McDuffie and Burke – can offer to new or expanding businesses.

But this year’s tier rankings are a different story in the metro area’s fastest growing county.

The Georgia Department of Com­munity Affairs – which administers the nearly three-decade old tax credit law – granted tier 1 status to two sections of Columbia County: a commercial zone around the Bobby Jones Expressway-Washington Road intersection in Martinez and the rapidly developing “Gateway” corridor near the Grovetown exit on Interstate 20.

“This has become a wonderful tool for marketing,” said Robbie Bennett, executive director of the Development Authority of Columbia County. “We’re the only county that’s a tier 4 on our side of the state. So having these incentives is a great benefit on the business recruitment side.”

The wealth of most Columbia County residents – about three-fourths of its working population – is tied to business and industry located outside county lines, primarily in Richmond County to the south and across the state line to Aiken County, according to census data.

Bennett says the new tiers align with the county’s desire to create higher-paying jobs within its boundaries, particularly in the Grovetown Gateway area, where a proposed Augusta University-affiliated hospital and proximity to Fort Gordon could spur development of new class A office space.

But the assignment of tier 1 status to wide swaths of Columbia County through the state’s “less developed census tract” and “military zone” designations were not based on any requests from the county, said Christopher Nunn, deputy commissioner of community and economic development finance for the state Community Affairs department.

“It is a relatively objective process,” he said. “This is very data driven.”

Although the calculation of tiers is a fairly complex process, Nunn said the agency relies on three primary economic indicators: a five-year set of a community’s poverty data, a three-year set of the county’s per capita income and its unemployment rate.

Tier designations can change yearly because state law caps the number of counties that can hold a tier status.

The number of tier 1 counties, for example, is 71. That means a formerly tier 1 county with even modest improvement in its economic data could get bumped down to tier 2, which is what happened this year to Glascock and Lincoln counties.

“Their metrics changed and they fell outside of 71,” Nunn said. “Best we could gather in that particular case is that it was probably no fault of their own.”

It’s also not unusual to see tier 1 census tracts in affluent counties, Nunn said, noting that “less developed” census tracts are found throughout metro Atlanta, where the only tier 1 county is Clayton County.

As for Columbia County, neither Nunn nor Bennett are sure what demographic changes caused the change in economic data that enabled two zones to qualify for tier 1 status.

“It will be interesting to look come January of next year,” Nunn said.

For now, county officials are most excited about the military zone census tract because it covers nearly all land south of I-20 between U.S. Highway 221 and Jimmie Dyess Parkway – including portions of incorporated areas of Grovetown and Harlem – and encompasses the future site of a $150 million AU Medical Center hospital.

Because the facility would be operated by the university’s nonprofit health care enterprise, the tax breaks might not apply to hospital jobs, but they most likely would be available for positions created at physicians’ practices, outpatient facilities and other offices that could spring up in and around the proposed 82-acre hospital campus.

In addition to health care jobs, the county’s economic development strategy for the Gateway corridor includes targeting the “professional services” industry, which could include everything from corporate headquarters to “back office” operations similar to ADP’s operations center in Augusta.

The county also is focusing on recruiting cyber-related companies and military contractors seeking proximity to Fort Gordon, whose gates are just past the Columbia-Richmond County line.

“All three (industries) play into the future of that Gateway corridor,” said Bennett, adding that the the extension of Gateway Boulevard will open up more than 300 acres of privately owned land for the kind of “class A” office space needed to attract companies to the area.

“That opens a great opportunity, or at least a planned vision, for that corridor,” he said.

The county’s new tier 1 sections can extend credits to companies that create as few as two new jobs paying at least $471 a week.

Most large employers in the area, such as Augusta Sportswear and John Deere Commercial Products, already have been made aware of the change through their accounting firms, Bennett said.

More than 80 percent of Columbia County businesses employ 10 or fewer people. The authority’s economic development coordinator, Ashley Swain, has been visiting with smaller employers in the area, including retailers and hotels, who may qualify for the additional tax break.

“So any company located in that corridor that is adding jobs needs to be talking to us,” Bennett said.

Like most state tax credit programs, Georgia’s is designed to encourage new businesses to locate – and existing businesses to expand – within a defined geographic area.

When all other considerations are close to equal, the value of a county’s credits can help tip the scales in its favor.

For example, a company looking to create 100 jobs in a tier 1 county is eligible for up to $2 million worth of credits over five years, compared to $625,000 in a tier 4 county such as Columbia County.

“I’m not saying in any way shape or form that we are in a bad place, but there’s no question whatsoever that I’m at a disadvantage on certain types of projects,” Bennett said. “If you’re a company motivated by incentives, are you looking at Columbia County?”

A common scenario in metro Augusta is for large employers to locate in Richmond County, where they receive the benefit of tier 1 tax breaks while still tapping into Columbia County’s better educated labor market.

Census figures show nearly 92 percent of Columbia County residents have a high school diploma, and more than 35 percent have a bachelor’s degree or higher, compared to 83 percent and 21 percent, respectively, in Richmond County.

Bennett acknowledges the irony of his county get-ting extra incentives for job creation, but he said that doesn’t negate the fact the county has a dearth of high-paying jobs relative to its neighbors.

“I’m very happy to be 155 out of 159 counties,” Bennett said. “But I still want to do everything I can go create jobs in Columbia County and to increase capitals investment to diversify our tax digest so that can ultimately benefit everyone else in the community.

“We need the ability to recruit and retain jobs locally as much as our neighbors need that same ability.”

 

Reach Damon Cline at (706) 823-3352 or damon.cline@augustachronicle.com

JOB TAX CREDITS AT A GLANCE

The state Department of Community Affairs annually ranks all 159 Georgia counties based on certain economic factors and assigns them to one of four tiers that allow them to offer qualifying businesses job tax credits that can be used to offset their Georgia income taxes.

In counties that are part of a “unified development authority,” such as those in metro Augusta, the standard credit is increased $500. In the Augusta metro area, all counties are Tier 1, with the exception of Lincoln and Glascock counties, which are Tier 2, and Columbia County, which is a Tier 4.

The tiers, their requirements and their benefits as they apply to area counties are as follows:

Designation Jobs creation Per-job tax credit

Tier 1 At least 2 net new jobs $4,000

Tier 2 At least 10 net new jobs $3,000

Tier 3 At least 15 net new jobs $1,750

Tier 4 At least 25 net new jobs $1,250

The annual rankings can include designations within counties for “less developed census tracts,” an area in which 10 or more contiguous census tracts meet the same criteria as a Tier 1 county, and “military zones,” for census tracts adjacent to federal military installations showing poverty rates of 15 percent or greater.

Source: Georgia Department of Community Affairs

 

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