The value of economic development incentives

When communities hear terms like “tax incentives”, “property tax abatements” or “PILOT (Payment in Lieu of Taxes) agreements,” it is understandable for residents to have questions.

Many people wonder whether these programs are simply tax breaks for large companies. The reality is a lot more complex than people may realize. Economic development incentives are carefully negotiated tools designed to encourage new investment and strengthen the long-term tax base of a community.

In Georgia, a Development Authority plays a unique role in that process. Development authorities were created by state law to help communities compete for economic investment. Their mission is not to give away public money—it is to help bring projects that might otherwise locate elsewhere while ensuring the community receives long-term benefits.

One of the most common tools used is called a “Bond for Title” transaction. Despite its name, it is not a traditional bond financing in many cases. Instead, a Development Authority temporarily holds legal title to a project while the company leases the property back. This legal structure allows the authority to negotiate a property tax abatement or a Payment in Lieu of Taxes (PILOT) agreement for a defined period. Once the agreement ends, ownership returns to the company, and the property is placed back on the regular tax rolls.

An important point that is often misunderstood is that an abatement does not mean zero taxes forever. Every agreement is negotiated individually. The Development Authority determines the length of the agreement, the amount of tax relief provided and any payments the company must make during the incentive period. Many agreements require annual PILOT payments that provide substantial revenue to local governments while allowing the company time to recover a portion of its significant upfront investment.

For example, imagine a prospective company is considering building a “$300 million manufacturing facility.” It has narrowed its search to two rural communities in neighboring states.

Without an incentive, the company’s annual property tax bill in Early County (33.44 millage rate) might be approximately $4 million. The company explains that while it likes Early County, property taxes are one factor that will influence where it chooses to invest.

Rather than losing the project to another state, the Development Authority negotiates a 10-year PILOT agreement. Instead of paying the full $4 million annually during the incentive period, the company agrees to pay $2 million per year while also committing to an investment of $300 million in the community, the creation and retention of a specified amount of quality jobs with above average county wages and construction of new facilities. This structure equates to a 50% tax abatement for 10 years.

During those 10 years, the community would still receive $20 million in PILOT payments. At the same time, the community benefits from hundreds of millions of dollars in private investment, construction activity, local spending, new employment opportunities and increased business for restaurants, hotels, suppliers, contractors and other local businesses.

When the 10-year agreement expires, the property returns to the regular tax rolls. Assuming the property’s value remains similar, the community then begins collecting the full annual property tax amount, which could exceed $4 million every year.

Now consider the alternative: If Early County refused to offer a competitive incentive and the company selected another location, the community would receive no investment, no construction activity, no new jobs, no local spending and no future property tax revenue.

This illustrates why development authorities evaluate incentives as investments—not giveaways. The objective is to secure long-term economic benefits that would otherwise cease to exist.

Development authorities also negotiate protections for the community. Agreements may include minimum capital investment requirements, job creation commitments, construction timelines, annual reporting requirements and provisions that reduce or eliminate incentives if the company fails to meet its obligations. The authority also determines the duration of the agreement and can require tax payments to increase over time through a phased approach.

It is equally important to remember that incentives are temporary, while the benefits can last for generations.

New industries expand the local tax base, support existing businesses, create employment opportunities, diversify the economy, and reduce dependence on a small number of employers.

Construction projects generate significant local spending and permanent facilities continue purchasing goods and services from regional businesses. Once an abatement expires, the community benefits from the full taxable value of the investment for years to come.

For rural communities like ours, economic development is highly competitive. Every neighboring state—and many neighboring counties—actively recruit projects using similar incentive programs. The question is often not whether incentives are offered, but whether they are structured responsibly to produce a positive return for local taxpayers.

The Development Authority of Early County takes this responsibility very seriously. Any proposed incentive is evaluated based on its expected economic impact, capital investment, job creation, infrastructure improvements and long-term value to the community. The goal is simple: ensure that anything offered today helps create a stronger, more diversified economy for Early County’s tomorrow!

Always remember: economic development incentives are not giveaways. They are strategic investments in our future. Is it better to receive 100% of nothing because a project located somewhere else, or negotiate a temporary incentive that brings millions (or billions) of dollars in investment and future tax revenue to our community? I assure you, this question lies at the heart of every economic development decision made in Early County.

Published in the Early County News on July 22, 2026.