Chevron gets huge tax exemption on huge investment

PASCAGOULA -- Jackson County supervisors gave Chevron a mega tax break Monday morning on a new base oil plant that cost the company $1.56 billion.

The exemption means that instead of the Chevron refinery paying the county $14.3 million in taxes on that new piece of the refinery next year, it will pay $4.2 million. And that number will go down each year as the base oil plant depreciates.

The exemption is coming at a time when the county is wrestling with a way to fix its struggling hospital system, and just a few months ago was wondering how to come up with $2 million or $3 million to help.

Supervisors from an outgoing board put the exemption through Monday, four weeks before a new board takes office.

They didn't wait to let the incoming board make the decision in January.

What they did was give Chevron 100 percent exemption, the maximum allowed under the law and policy for the next 10 years.

Board President Barry Cumbest said "We're just doing it today, no particular reason. It can be done this year or next year, either one. We decided to go ahead and do it."

Supervisors Mike Mangum said, "Normally we do it before the tax bill comes due Feb. 1."

Supervisor Melton Harris said, "We're under no obligation to wait."

Passed without public discussion

It was on the consent agenda, which means the board can pass it without discussion, which it did.

The agenda item didn't say what it was for or how much the exemption would be.

Supervisors said they made the decision without discussing the issue among themselves. "At least not more than two supervisors talking about it at a time," Harris said.

There was no official, scheduled public discussion by the board about how it might affect the county.

The exemption was granted because the company met the county's policy on tax exemptions, one supervisor said.

Economic Development leader George Freeland said the Economic Development Foundation helped the county see how the industry met the policy.

Mangum said that such exemptions are not automatic and that the board could turn them down. "But it's good business practice not to turn down your own policy."

It was also explained that the board, under its policy, could grant part of the exemption request or grant an exemption for less than 10 years.

'This needs to be looked at'

Incoming Supervisor Randy Bosarge said the agenda wasn't public until over the weekend. And he couldn't find out how much the exemption was for. When he finally learned, he lamented the amount.

He said that was money the county could have used to work on roads and other infrastructure, "maybe use it to get our taxes down, encourage people to live here.

"It's not that I'm against tax exemptions, I think they can be done a lot fairer not only to the corporations, but also for the taxpayers, the citizens," he said. "It's just an old way of doing things that could use an upgrade.

"I'm not trying to be radical. I just want it to be fair for everybody."

Bosarge said with the Jackson County Board of Supervisors, there never seems to be a compromise, "it's always 100 percent for the industry. I think this needs to be looked at."

Looking at the refinery's quarterly report recently, Bosarge said he saw the company added 27 new employees, 17 of them live in Mobile County. Only four live in Jackson County.

Policy is its bond to business

Alan Sudduth, the spokesman for Chevron in Mississippi, pointed out that the refinery pays a lot in taxes. The company will pay $48 million this year -- $26 million to schools and $22 million to the county.

The amount is actually down from last year because the county was collecting more when the base oil plant was under construction. Jackson County doesn't exempt construction costs.

But Sudduth said, the refinery value has steadily increased since 2008. It gives the county a stable tax base. The county now has an industry that's valued at $3.87 billion, he said.

"We're paying more (in taxes to the county) than we would have paid without the project," Sudduth said.

Freeland said Chevron met the county's policy 100 percent, that's why it got everything the county offers in industrial exemptions.

He said the policy is the county's bond, it's word to new industry and existing industry that they will get a break if they invest.

"If this policy isn't in the best interest of the community," he said, "then we need to sit down with the Board of Supervisors and consider it."

This story was originally published December 7, 2015 at 12:48 PM with the headline "Chevron gets huge tax exemption on huge investment ."