Boyle votes to give Meggitt incentives for increased expansion

Published 9:33 am Wednesday, January 24, 2018

Boyle County Fiscal Court voted in favor of modified tax incentives for Meggitt Aircraft Braking Systems Tuesday. Even though Meggitt is receiving additional incentives because it’s expanding more than previously planned, Boyle County will now actually contribute a smaller portion of the incentives than before.

Instead of giving Meggitt up to $150,000 in credits on payroll taxes, Boyle County would now be giving the business up to $143,392.40, according to the proposed ordinance, which the fiscal court held a first reading on.

That’s because since Meggitt was first approved for tax incentives in 2015, the City of Danville has increased its payroll tax from 1.5 percent of workers’ paychecks to 1.9 percent. Boyle County’s payroll tax has remained flat at 0.75 percent. The local incentives are divided between Danville and Boyle County based on what percentage of the total payroll tax rate each entity is responsible for.

Email newsletter signup

Before Danville increased its payroll taxes, Boyle’s 0.75-percent rate represented around a third of the total payroll tax rate. Now, with Danville’s higher rate, Boyle represents only about 28 percent of the total rate, based on numbers from the proposed ordinance.

Danville has already finalized its portion of the expanded incentives. The city will be providing up to $368,723.30 — up from $250,000 previously.

The incentives function as credits paid back to Meggitt out of workers’ payroll taxes. New employees that are a part of Meggitt’s expansion will still pay the full 2.65-percent payroll tax out of each paycheck, but 1 percent of their wages will be paid back to Meggitt by the city and county. While Boyle’s percentage of that credit is falling to 28 percent, Danville’s is rising from 62.5 percent to 72 percent, according to a document provided by the City of Danville.

Meggitt’s incentives are based on how many new employees it hires, and they are dependent on maintaining a minimum number of new employees. The original expansion announced in 2015 planned for up to 66 new jobs; now, the plan is for up to 94 new jobs. Meggitt must maintain at least 73 new jobs in order to qualify for the incentives.

The incentives would be paid to Meggitt over the course of 15 years. Originally, Meggitt was qualified to receive up to $400,000 over that time period. Under the expanded incentives, the company could receive up to $512,115.70.

Jody Lassiter, president of the Danville-Boyle County Economic Development Partnership, told Boyle County Magistrates Meggitt would pay $51.2 million to its new employees during the 15-year time period.

“We all too often focus on the incentive aspect and not the investment aspect,” Lassiter said. “… I think we need to emphasize that as being the significant investment.”

The original expansion project “relocated and integrated” Meggitt’s “wheel-and-brake maintenance and repair operations facility from Akron, Ohio, to Danville,” according to an October news release. “The expansion will help (Meggitt) meet current and future demand from new clients, including providing components for the Canadian Bombardier C-Seires aircraft and Gulfstream 650 business jet.”

Magistrates approved the first reading of the revised ordinance on a voice vote.