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Re: SG-W:/ Power Plant Economics



Thanks for the background info, Andrew. That was how Panda presented the 
numbers, but I'm ignorant in that area and none of the township or county 
representatives in the room commented on the topic. I wondered whether 
they were playing up the benefits to the school district in a way that 
might be misleading in the absence of such knowledge. I do remember that 
one of Panda's people answered that the abatement was "the 
standard--50%", after someone asked about it. That wasn't in the 
presentation.

Steve

>The state doesn't normally give tax abatements, the local government does.
>State involvement usually is through MEGA, which requires the local 
>government
>to grant a tax abatement before it will provide tax credits, etc. So, the 
>impact
>locally will pronbably be:
>
>50% abatement on all Township taxes [including those at the county level, 
>so all
>Washtenaw county taxpayers are impacted to some degree].  If the Township 
>only
>levys a mill or two, this might not be much money either way.  Washtenaw 
>County
>would probably be more affected by the local abatement.
>
>The local school district will only receive tax revenues directly from this
>project if they levy an enhanced millage.  Otherwise, school taxes go to 
>the big
>pot in Lansing where they are redistributed according to the state aid 
>formula.
>School taxes can not be waived by a local abatement but the state does 
>have the
>option of waiving school taxes.  They might get money to pay for building 
>bonds
>but I'm not 100% sure on that.
>
>I would guess that most of the money is going to be going to Lansing in 
>the form
>of school taxes [6 + 18 = 24 mills] which will trickle back down locally from
>the School Aid money.  The next big winner will be the state through various
>business taxes.  The Township will probably get a little of this money, 
>less now
>with the abatement, more later when the abatement ends.
>
>Andrew Mutch
>Novi
>
>
>> Some interesting economic tidbits: The project would get a 50% tax
>> abatement from the state for 12 years and would bring in $3 million in
>> annual tax revenues to the state, township and school district. I don't
>> know how that would be divied up. The projected life of the plant is 30+
>> years.


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