Eli Lilly and other incentive payments drive multi-year expenses; county projects payments could run into 2034

Roche, the county budget director, explained how tax increment–style incentive agreements and economic development grants create timing mismatches between realized revenue and later incentive payments, and used Eli Lilly as an example of how investments that boost tax revenues in one year can become expense items in later budgets.

Nut graf: The county’s five-year forecast includes a schedule of incentive-related payouts that rise in later budget years; Eli Lilly is a large component, and staff estimated that, under current assumptions, incentive reimbursements to Eli Lilly could continue through roughly tax year 2034.

Roche walked the board through an illustrative line item sheet for Eli Lilly: tax year 2023 appraised real estate improvement value (under construction) was shown around $104 million on file for the county’s calculations for the grantable portion of assets (not including land). Roche said the taxes tied to those improvements become part of the pool that can be used to pay incentives in later budget years under the terms of the agreements. He cautioned the figures are projections and tied to appraisals and the timing of construction and taxation.

On timing, Roche said the county’s best estimate — subject to when construction and taxation begin — is that reimbursements to Eli Lilly would start to appear in county expenses in the FY27 budget cycle and that the last payment could fall near tax year 2034 depending on final valuations and incentive triggers. Roche also noted that some incentive payments are contingent on performance and may be smaller if companies do not meet the full incentive metrics.

Commissioners sought a line-by-line breakdown showing the revenue added by the investment and the projected incentive payment schedule. Roche said he had prepared a small, hard-to-read example sheet and would provide digital copies: “That kind of you'll see the green circles in the lines where the investment happens, moves into an expense item later,” Roche said.

Separately the presentation flagged that a prior temporary county arrangement tied to the North Carolina Research Campus (described as a modified TIF arrangement) is expiring in 2027; staff said earlier special arrangements and baseline years differ by agreement and that some temporary offsets to county revenues will end as those agreements expire.

Ending: Roche and staff agreed to provide more detailed, digital line-item schedules of incentives and their revenue/expense timing so commissioners can weigh incentive payouts against realized growth when finalizing the recommended budget.