Harrison County supervisors consider Northrop Grumman tax break - WLOX.com - The News for South Mississippi

Harrison County supervisors consider Northrop Grumman tax break

GULFPORT, MS (WLOX) -

By Steve Phillips – bio | email

GULFPORT, MS (WLOX) -  A request from Northrop Grumman to Harrison County has re-kindled a debate about tax exemptions for industry.

The company asked county supervisors for a five year tax exemption on new equipment added to Northrop Grumman's Gulfport facility. That specific request prompted a more general discussion about granting tax breaks.

Tax exemptions for industry have long been a sore spot for some supervisors. Companies can qualify for the tax breaks by either expanding or making certain capital improvements.

In Northrop Grumman's case, the requested exemption is for adding new equipment as the Gulfport facility transitions from steel and aluminum to fiberglass composites. Northrop Grumman's Gulfport facility manufactures composite masts that help make Navy ships undetectable to enemy radar.

"They have moved from building steel products there to this fiberglass composites. And their projections are to continue to grow. This exemption is for equipment that was added after Hurricane Katrina," said Larry Barnett, Harrison County's development director, who appeared before supervisors to ask for the exemption.

Supervisor Marlin Ladner has been outspoken in the past about the necessity of granting such exemptions. In this case, he questioned the company's employment. The number of jobs at the Gulfport facility dropped dramatically between 2002 and 2007.

"I have a problem with that," said Supervisor Ladner. "The point I'm trying to make is if we're granting tax exemptions primarily because they're hiring people, the record is not indicating that."

The company's vice president for finance told supervisors the transition from craft facility to technology facility means a higher skilled and higher paid workforce. He does expect about 100 new jobs to be added in the coming year.

"The head count is based upon our business projections of getting Navy orders associated with composite masts. Our business case says we'll be a little over 400 in the next year or so," said Sam Alsgood, a vice president for finance at Northrop Grumman.

Supervisor Windy Swetman suggested a tax exemption based on employment expectations.

"I am in favor of a one year exemption so that we can see that Northrop Grumman continues to meet their projections and they can come back at that point," said Supervisor Swetman.

"We're experiencing budget issues today from the state to the local level and we're being requested now to grant additional exemptions," said Supervisor Ladner.

Northrop Grumman was granted a one year tax exemption on a vote of three to two. Supervisor Connie Rockco joined Supervisor Ladner in voting against the tax break.

The one year exemption will save the company  $11,000 on its tax bill.

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