Our view: Two sets of problems: one good, one bad

September 13, 2013 11:47:04 AM



Lowndes County is about to have a problem, the sort of problem most other counties and cities would love to have. 


Over the next five years, the county is going to have more money than it knows what to do with, a happy circumstance created by the boom in industrial development in the county. 


Beginning with Severstal Phase 1 and continuing with other smaller county industries in the years to follow, the fee-in-lieu ad valorem agreements will expire, pumping roughly five to eight million additional dollars into the county coffers. 


Fee-in-lieu is a fairly recent concept. Previously, new industries were given a period of years where they had no tax obligation at all as an enticement for coming to the area. It proved to be a burden for the communities, though, because the county or city often had to spend big money to provide the infrastructure required for industrial development. 


The fee-in-lieu changed all that. Instead of a free pass, the industry paid a fee that was much smaller than its tax obligation that expires after a given amount of time, often 10 years. 


Generally, the fee is one-third of the ad valorem taxes that would be paid to the county and its schools. The industry, however, pays the full school tax. 


It's a good break for the industry and an arrangement that allows the county to collect money it can apply to whatever infrastructure costs remain or, in the absence of that, put in its general fund. 


How much money will the county get when a fee-in-lieu expires? 


When Severstal's Phase 1 comes off the fees in a couple of years, the county will be getting about $3 million more each year. Other smaller industries whose fees expire will add to that total. 


On top of that, the county will soon be able to invest the $30 million in its hospital trust fund in something other than a certificate of deposit, whose dividends have been almost microscopic in recent years.  


County officials hope for a return of anywhere from 4 to 8 percent, but even at a 2 percent rate, there is a real chance to build the trust fund through the "miracle of compound interest." 


So you can see, Lowndes County is going to be awash in cash pretty soon. 


The county has a rare opportunity now and a visionary plan for investing this windfall could go a long way in insuring prosperity for years, if not decades, to come. It would be a shame if, say 10 years from now, county officials would look back with regret and say, "I wish we would have done this when we had the money." 


Lowndes County officials should also recognize its symbiotic relationship with the city of Columbus, which can either be a drain on the growth and prosperity of the county or complement it. 


There may be a temptation for county officials to say, "who needs Columbus?" But the reality is that Columbus will remain the commercial and retail hub of the county. A successful Columbus adds to the county's welfare, rather than detract from it. 


The Riverwalk and soccer complex are two examples of a collaborative effort that has proven to benefit both the county and the city. Yet they remain the exception rather than the rule. 


Certainly, there are more opportunities to work together. 


Having said that, we do understand the county's reluctance to partner with the city. The lack of vision and leadership we see in the city certainly inspires no confidence. The city's latest budget reflects that: Four of the city's five biggest departments saw cuts in the 2013-14 budget. One department budget did increase, however: Administration. 


What that tells us is that the only thing that is really growing in Columbus is the city's bureaucracy. 


Until the city gets its act together, it's hard to imagine the county will be inclined to invest in Columbus and it's difficult to criticize the county for that reticence. 


Lowndes County does, indeed, have an enviable problem.  


The city of Columbus has a problem, too. 


A problem no one envies.