County given economically distressed status
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The change in the county’s rating is due, in great part, to the imminent closure of the Carrier plant and the likely effect it will have on the county’s unemployment rate, along with several other plant closures or downsizing in the last several years.
Effective July 1 of this year, Warren County was listed among 26 economically distressed counties in Tennessee, according to the Tennessee Department of Economic and Community Development. The decision to place a county on the list is based on several criteria, including three-year average unemployment, per capita market income, and poverty rate. The only neighboring county on the list is Grundy County.
Though it might sound like a negative assessment, the designation is actually a move by the state to aid the county in recruiting new industry by providing a number of improvements to various programs already provided by the state.
“It puts us in an area where we’re allowed more incentives,” said Rigsby. “We can apply for state incentives and we get looked at more favorably.”
The size of low-interest loans the county can use to lure industry also increases.
“The amounts go up,” Rigsby said. “Normally $500,000 is the maximum for a Community Development Block Grant. But the enhanced county status allows you $750,000. Also on a normal CDBG grant of $500,000 the repayment time for that loan is normally 15 years, but for an enhanced county it’s up to 20 years.”
The program offers some major benefits on interest as well.
“The rates are even more favorable for 20 years,” Rigsby said. “The first five years of the 20 years the rate is five points below prime. The second five-year period it’s four points below prime, and next 10 years it’s three points below prime.”
With the interest rates we have now, Rigsby said the county could come up with some really low-cost loans. The main requirements are that the money goes for new industry and that the industry provides at least 25 new jobs, and spends at least $500,000.
Enhanced status also includes a variety of tax incentives, including substantial breaks on franchise tax, excise tax and a jobs tax credit amounting to $4,500 per job, as opposed to the usual $2,000, which is applied to both franchise and excise tax as well.
Even though the county’s current unemployment rate, at 4.2 percent, is below the state average, the potential loss of jobs here has led the state to give Warren County its economically distressed status, and Rigsby says he plans to use the advantages this status offers when he and County Executive Kenneth Rogers make their trip to Canada in September.