BY STEPHEN H. COWLES/CONTRIBUTING WRITER
Playback58@gmail.com

ISLE OF WIGHT—During Thursday’s meeting, Isle of Wight County Supervisors voted 5-0 to reduce the tax it levies on manufacturers for their machinery and tools by 26 percent.

At the new rate of 70 cents per $100, Commissioner of Revenue Gerald Gwaltney expects the county to take in $325,000 less than this year’s $12.1 million, when the rate was 95 cents per $100. In addition, $5.7 million was lost when International Paper closed in 2010.

The new rate takes effect in 2012. Each Virginia locality with industry has such a levy, but determines its own rate.

School Board member Herb DeGroft told supervisors during a public hearing he was concerned about whether it was wise to lower the tax rate.

“We need every dollar for Isle of Wight to meet its needs,” said DeGroft.

Outgoing Newport District Supervisor Stan Clark said the reduction is an incentive for businesses to expand and new businesses to move here.

“(The decrease) makes us competitive,” Clark said. “It’s the business-friendly thing to do.”

Hardy District Supervisor JoAnn Hall said the new tax will pay for itself when new companies open in the county.

Clark pointed to Green Mountain Coffee Roasters, which plans to open in the Shirley T. Holland Intermodal Park on Route 460, creating 800 jobs and investing $180 million. The jobs will pay an average of $40,000 a year.

The proposal for the tax reduction came from the county Economic Development Director Lisa Perry. Although supervisors had realized the need to reduce the rate to attract industry, Clark said.

Perry approached the board eight weeks ago with the tax reduction proposal.

“From the very first day, I immediately began talking with Gerald (Gwaltney) about the rate,” she said. “At the time, it didn’t seem terribly critical because there was not a lot of water capacity.”

That issue and the need for gas transmission have been addressed and we “can now attract bigger projects,” said Perry.

She said when International Paper spoke with her about the proposed fluff pulp project at the closed IP mill in Franklin, the business was “very concerned” about the rate.

“Green Mountain made it abundantly clear that the tax could be a deal breaker,” Perry said.

After much research, the county’s rate was “felt to be in the middle,” she said.

“But not just for Green Mountain, but because the time is right,” said Perry. “It’s the right time and right reasons.”

In comparison, Southampton’s Commissioner of Revenue Amy Carr said the county’s rate is $2.40 per $100. In tax year 2011, $355,259 was generated. When IP closed, $43,068 was lost.

Franklin Commissioner of Revenue Brenda Rickman said the city’s rate is $2 per $100; in the 2011 tax year, $60,651was raised. But Rickman stressed that the city does not have the amount of industry like its county neighbors.