Incentives help Georgia land NCR

Georgia expects to net $49 million over the next decade from NCR’s relocation moves to the state, even though it had to give away more than $60 million in incentives to woo the corporate giant.

“We feel very good with the return on investment,” said Alison Tyrer with the Georgia Department of Economic Development. “This is what everybody’s looking for.”

The vast majority of NCR’s corporate gift comes from House Bill 438, passed by the General Assembly in April and signed by Gov. Sonny Perdue in May.

The bill extends a state tax credit of $5,250 per employee per year to any company that brings more than 1,800 jobs to Georgia and has a payroll of $150 million or more or invests $450 million in land and facilities. The deal lasts for five years, after which the company must pay taxes in full.

By year 10, the state fiscal note written to evaluate the deal shows Georgia will have recouped the $60 million investment and earned $49 million in new revenue, Tyrer said.

NCR promises to bring 1,250 jobs to its new headquarters in Duluth, with another 870 headed to Columbus, where the company will make automated teller machines. The company already has 2,800 jobs in the metro area, chiefly at a facility in Duluth and another in Peachtree City.

Rep. Mark Burkhalter (R-Johns Creek), the speaker pro-tem, said NCR’s decision validates lawmakers’ overwhelming support for the huge tax break bill. In two passes through the House and one through the Senate, the bill received 341 yes votes against just 31 no’s.

“This relocation here is evidence that tax incentives are the way to incentivize companies to move to Georgia,” Burkhalter said. “That leads to more revenue and more jobs.”

Perdue and NCR’s chief executive, Bill Nuti, spoke by phone the same mid-February day that Georgia legislators introduced HB 438. However, lawmakers said they were not aware of any specific deal the bill was intended to facilitate.

State officials say HB 438 will be worth $56.9 million to the company in relief from payroll withholding liability and income taxes, Tyrer said. The state is also sweetening its deal with job training and other in-kind services to make the incentive package worth more than $60 million.

Nuti said the tax breaks were included in an analysis that looked at such issues as the supply chain, workforce, tax structure, transportation network and other issues.

“The incentives were a part of it but they were not a big driving factor,” Nuti said. “It would be misreading it to say the dollars drove the decision.”

Perdue noted the deal offered to NCR was supported by “statutory incentives,” not a specific package of gifts and giveaways to land the deal. Under HB 438, the same deal would be available to any company that brought enough jobs and payroll to Georgia, he stressed.

“We didn’t start the incentive game,” the governor said.

By comparison, Kia got a $258 million incentive package three years ago to create an estimated 2,900 jobs at a new manufacturing plant near West Point, Ga. That deal included about $90 million in statutory tax breaks as well as donations for site preparation and other improvements.