Fulton aldermen, with one exception, have approved granting local industries nearly $21-million in tax exemptions.

In a split vote last week, aldermen approved a series of tax breaks for five Fulton industries. The exemptions ranged from $59,618 to $18.4 million. The companies that requested these exemptions included F.L. Crane & Sons, Homan Wood Products, Tri-State Lumber Company and Mueller Copper Tube.

According to Fulton City Clerk Ceburn Gray, the exemptions included purchases of machinery and equipment, raw materials and various improvements. Prior to being taken up by the city board, the Itawamba County Board of Supervisors had approved the exemptions.

The exemptions represented approximately $97,500 in tax revenue.

Ward IV’s Brad Chatham was the lone aldermen to vote against the tax breaks, a move he signaled he’d make when the board first took up discussions of the exemptions in late June. Chatham questioned the fairness of granting tax breaks to cooperations.

During that meeting, Chatham motioned to deny the tax exemptions, but failed to get a second. The board tabled the issue with plans to discuss it further during the board’s regularly scheduled meeting on July 7. That meeting was postponed when an employee of Fulton City Hall tested positive for the virus COVID-19.

Businesses apply for tax exemptions through both the county and city boards. The countywide board of supervisors typically votes on them first. If the exemptions are approved by supervisors, city aldermen usually follow suit.

Exempting certain taxes for large businesses is nothing new. In an effort to attract companies and, later, encourage their growth, municipal leaders often exempt the companies from paying real and personal property taxes for at least 10 years, frequently with the ability to keep receiving exemptions on new equipment, materials or expansions in hopes that said companies will continue to grow.

These tax exemptions are only open to manufacturers that employ many people and don’t apply to school taxes. Exemptions also aren’t guaranteed; local leaders reserve the right to deny an exemption for any reason.

Because other municipalities also offer tax breaks to incentivize large companies to locate within their borders, local officials often claim it only makes sense to do the same. The argument is, big industries like Mueller Brass and Tri-State Lumber provide more than just tax dollars to the counties and cities in which they’re located; they employ people, who then turn around and spend their money in those communities, which in turn fuels sales tax revenue.

Although tax breaks represent sizable chunks of lost revenue for the municipalities that give them, these industries still pay a great deal in taxes. In 2019, for example, Mueller Copper Tube paid the City of Fulton $230,198 in taxes, even with the exemptions they were granted. The company’s current requested tax exemption would equal approximately $85,587 in lost revenue. Together, Homan Wood and Homan Forest paid just over $9,000 in city taxes, last year. Their combined exemption requests equal $1,361 in lost revenue.

Although Chatham has historically voted against granting tax breaks to the city’s industrial businesses, the gesture has been largely symbolic. His fellow aldermen have almost uniformly voted in favor of granting industrial tax breaks, with the notable exception of a July 2019 vote which saw Alderman at Large Liz Beasley joining Chatham to vote against a $3.15-million exemption from Mueller Copper Tube.

Because alderman Joey Steele was absent that night, Mayor Childers broke the tie. He voted in favor of granting Mueller the tax exemption.

adam.armour@journalinc.com

Twitter: @admarmr

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