Tax Dollars From 2 Gas Pipelines May Be Less Than Expected

TOLEDO, Ohio (AP) — Developers of two new natural gas pipelines in Ohio want to reduce their valuation, which would decrease by millions the anticipated tax dollars coming to schools and communities.

Owners of the Rover and NEXUS pipeline systems filed separate requests with the Ohio Department of Taxation earlier this month to have the values of their pipelines lowered by 30% to 50% in many places, The Blade reported.

The values sought by the companies vary from county to county and will ultimately be determined by the state.

Valuations are what auditors use as a basis for calculating property taxes.

Specifics of the appeals are confidential, and the process could take months to decide, department spokesman Gary Gudmundson said.

Schools and communities counting on the tax windfall say they’re in a tough spot — at least one community expected to use pipeline property taxes to make up 50% of its tax base and the fluctuation could impact the building schedule for a new school in another.

The pipeline developers are within their rights to seek lower property taxes annually, but the process makes it especially difficult for school districts, which depend the most on such windfalls, to plan ahead, said Mike Kovack, former president of the County Auditors’ Association of Ohio.

“I would like to see the Department of Taxation protecting the local tax base and not siding with an out-of-state company poised to make billions,” Matthew Oestreich, Wood County auditor, told The Blade in reference to the Nexus pipeline that runs through his county. Two companies, Enbridge and Detroit’s DTE Energy, partnered to spend $2 billion to build the 255-mile-long (410-kilometer-long) pipeline that stretches across northern Ohio and into Michigan.

The $4.3 billion Rover Pipeline consists of twin 42-inch high-pressure lines that span about 700 miles (1,100 kilometers) miles from northern West Virginia into Michigan.

The Rover pipeline became fully operational this past year, meaning stakeholders were planning on particularly strong property tax revenue from it.

In separate statements, the two pipeline companies said the appeals were justified based on market conditions and what they considered to be inflated valuations by the taxation department.

NEXUS spokesman Adam Parker said DTE/Enbridge “is committed to paying a fair and justified property tax based on the true market value of the pipeline and looks forward to developing future economic and taxing opportunities in Ohio.”

Auditors can go to court to challenge the final decision of the taxation department.

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Source: The Village Reporter