Back when there was a PATH project, we heard lots of power company propaganda about the “benefits” of big transmission lines. One of those benefits was “increased taxes.”
Land owners who were to give up their land for PATH would continue to pay taxes on that land in the form of real estate property taxes to their county government. Real estate values around the power lines would likely have fallen, which would have reduced real estate property taxes which go to funding county services and schools.
The only things that AEP/FirstEnergy would have added to the local tax structure were the power line towers and lines themselves. These items are taxes as personal property, just like your car or farm animals.
But here’s the kicker — because the power companies are utilities, their taxes are not set by the local county Assessor. Utilities’ personal property appraisal is approved by the WV State Board of Public Works, based on figures given to them by the State Tax Department.
Does the Board have any way of independently verify the appraisals given to it? No, because it no longer has any staff to do the job.
Don’t believe me? Here is the description of the situation in today’s Charleston Gazette article:
The Board of Public Works on Monday postponed its approval of 2012 property tax assessments on utilities in the state for at least 10 days, after state Superintendent of Schools Jorea Marple raised concerns about the board’s inability to independently verify the proposed valuations.
“I think this is a really important issue, and a responsibility of the Board of Public Works is to make sure processes are in place that are fair and equitable,” Marple said.
Under state law, the board — made up of the governor, secretary of state, auditor, treasurer, agriculture commissioner, attorney general and superintendent of schools — must approve annual property valuations for all utilities operating in the state, including water, natural gas, electric and telephone companies, as well as railroads.
Marple’s concern is that the board is being asked to accept the recommendations of the state Tax Division, with no way to independently determine if the proposed assessments are fair and accurate.
“This directly impacts our ability to deliver quality education to our children,” said Marple, noting that property taxes are a major funding source for public schools.
On Monday, the Tax Division recommended a total valuation of properties owned by utility companies of $8.46 billion, a reduction of about $41 million after several utilities appealed their preliminary valuations.
Attorney General Darrell McGraw, Marple’s husband, noted that prior to the adoption of the Modern Budget Amendment in 1968 — which took away the board’s authority to prepare the state budget each year — the board had its own employees, unlike today.
“There’s absolutely no staff to give us an independent view of anything we do,” McGraw said, adding, “We’re at the sufferance of any representation anyone makes.”
Note that this year, the appraised value of all utility personal property was reduced by $41 million. This is after First Energy built a brand new TrAIL transmission line and gas utilities have been building pipelines like crazy all over West Virginia. We don’t learn from the Gazette story which companies got reductions, so we don’t really know the details, but the situation looks pretty fishy.
So, we don’t really know if it is a “tax benefit” or not to have new utility personal property in our state. We know tax rates for power company equipment are already lower than the rates average citizens pay on their personal property. It looks like WV has been moving backwards in determining the values on which that low tax rate is calculated. If power company personal property were valued by local county assessors, at least citizens would have a better sense of whether those values were reasonable or not. More important, citizens would be in a better position to know if the power company taxes were really “benefiting” their counties.