Property Taxes and Power Plants

Another of the research efforts by a Friend of McHenry County Blogstimulated by the proposal to build a gas-fired power plant in Oakwood Hills:

Property Tax and Power Plants

Ill-researched proclamations that a power plant will bring tax money to a community require closer scrutiny of details.

Signs against the Oakwood Power Plant proposal have not addressed the property tax question.

Signs against the Oakwood Power Plant proposal have not addressed the property tax question.

A power plant may pay property taxes, but the net property tax impact may be negative; a lowered net value of overall assessment (due to home values dropping as a function of insertion of the disamenity) may result in tax revenue loss which exceeds the property taxes paid by disamenity, and this may result in a higher tax burden for other taxpayers in the community affected.

Or, the power plant may pay property taxes for a while at an agreed assessment, and then sue [or appeal] for reduced assessment when the time comes to abandon or wind down their blighted property.

Or the disamenity may claim assessments were too high to begin with and sue for reimbursements from community which has suffered their presence for years.

[Or Original cost estimates may include what is defined as “personal property,” which is no longer taxed in Illinois.]

Due diligence by zoning board officials should include independent objective research on these topics:

1. How much tax revenue will be lost by the devaluation of assessed values of current homeowners in the vicinity of the disamenity newly granted zoning variance? (This issue can be addressed by examining scholarly studies of statistics derived from communities which have had (major source polluter) disamenity zoning variances granted.)

2. What realistic tax revenue can be expected from disamenity, without fear of future clawback lawsuits? (See news articles cited below for recent relevant instances.)

3. If the property seeking zoning variance were left to its original zoning, what amount of property taxes could be expected versus comparisons to disamenity petitioner for zoning variance? (That is, would a light-industrial- zoning-compliant use of property end up paying more, less, or equivalent property taxes to risk-normalized projections for the disamenity seeking zoning variance?)

News articles below should be studied by Oakwood Hills officials:

Two Power Plants Win a Lawsuit, and Property Taxes Rise Drastically in Several Towns

Published: January 23, 2007

Assessed value of Bow power plant drops nearly $50 million; tax rates to spike

Monitor staff
Monday, November 11, 2013
(Published in print: Tuesday, November 12, 2013)

Power Plant Closures Generate Taxing Troubles

by Spencer Rumsey on March 3, 2014


Power plant asks for tax cap

By James Walsh
Times Herald-Record
Published: 2:00 AM – 08/07/14
Last updated: 12:30 AM – 08/08/14


Property Taxes and Power Plants — 7 Comments

  1. Cal:
    You know too much about taxation to make that mistake.

    The amount of tax revenue taken in is a function of the local elected officials levying and spending.

    If the property values go down, the rates increase to raise the amount of money in the levy.

  2. Right Charles, rates have to go up to meet the dollar amount levied.

    Everyone who’s not devalued by the plant gets high assessment times higher rate= higher taxes.

  3. In addition to this research on and proposed questions regarding “net gain” in dollars to taxing bodies from levies….

    Let us not forget that this county is a PTELL county and thus future levies of taxes are limited to CPI or 5% above the previous year, whichever is lower.

    The Empty Promise, or in their terms empty estimate, of significant additional property tax dollars the school districts will receive is impossible.

    The school district will only be able to levy and collect the amount allowed by law (previous year levy plus allowable increase) which is then distributed across the properties within the taxing body.

    There is no windfall for the schools from this proposed project.

  4. New construction can bring in new money in excess of the PTELL (Tax Cap) limits

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