Two pipelines running through Ohio want to pay less taxes, meaning a possible cut in their revenue next year to Fulton County entities.
Both the Rover and NEXUS pipelines have filed appeals with the Ohio Department of Taxation over their public utility tax valuations. The state’s assessment of the pipelines’ values are used by county auditors to determine the individual amounts of pipeline revenue allotted to such entities as school districts and townships.
According to Fulton County Auditor Brett Kolb, the Rover pipeline is appealing its value at approximately 50% of the original determination, and NEXUS is appealing its value at approximately 40% of the original determination. If successful, the appeals would drop in 2020 the county entities’ Rover revenue from a projected total of $3.99 million to $2.28 million, and the projected NEXUS revenue total of $6.7 million to $4.1 million.
Kolb said because this is the first year the NEXUS pipeline is subjected to the public utility property tax he didn’t anticipate it would generate a large revenue. Last year, the tax revenue from the Rover pipeline – which the company didn’t appeal – totaled $3.25 million for county entities.
At this time, both pipeline companies are permitted to pay only what they consider their liability according to their appeal, Kolb said.
Gary Gudmundson, spokesperson for the Ohio Department of Taxation, said proceedings for the appeals are confidential, and will take time.
“These sorts of appeals with significantly large, complex projects can take months to work through,” he said. “The taxpayer can choose to pay on the full value that the department made available to the taxpayer or on the undisputed value while the appeal is being worked through.”
NEXUS spokesperson Adam Parker would not answer specific questions concerning the pipeline’s tax appeal. In an email, he said, “Consistent with how individuals, homes, and businesses are taxed, our property tax assessment should reflect the true market value of the pipeline…The previous tax estimates were prepared by a third party in 2016 and were based on the scope of the project at the time the study was conducted. We have consistently been clear that these tax estimates were provided for illustrative purposes only…and should not be relied on to determine future budgets.”
A spokesperson for Rover Pipeline did not return requests for comment.
In Fulton County, the 42-inch Rover pipeline snakes through Chesterfield, Franklin, German and Dover townships. The 36-inch NEXUS line goes through Amboy, Fulton, and Swancreek townships.
“On our side, we’ll budget accordingly,” Kolb said of the county’s share of revenue. “We’ve always been conservative in estimating, and we’ll continue that practice.”
Swanton Local Schools Superintendent Chris Lake said the county auditor couldn’t provide a hard revenue number to the school district. But he added that whatever amount is received it won’t affect programs or services.
“That money was never accounted for in our five-year forecast,” Lake said. “We weren’t going to start making plans for money we didn’t have. The pipeline money will be added to the bottom line, but it was never going to get us ahead. We’ll just see how that all shakes out in the end.”
He said the school district will decide how best to use pipeline revenue when it arrives. Until then, “we just have to let the appeals process play out.”
Wauseon school administrators did include the estimated $20,000 in pipeline revenue for 2020 in the district’s five-year forecast. However, it’s absence would not affect programs or services, Superintendent Troy Armstrong said.
“The district appreciates every dollar generated for revenue, so the possibility of a reduction would be disappointing,” he said.
Before the appeal, Pike-Delta-York schools were projected to get just over $573,000 from NEXUS in 2020. Should the appeal stand, the school district will lose about $225,000 annually in pipeline revenue.
“We’re going to see a huge reduction,” Superintendent Ted Haselman said. “It’s definitely income we were hoping to receive. It was disppointing that they appealed it.”
The school district is reviewing options for a potential permanent improvement levy, he said. “Had this pipeline appeal remained at the original dollar amount that could have changed that outlook,” Haselman said.
Reach David J. Coehrs at 419-335-2010.