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Re: SG-W:/ Power Plant Economics

One correction to something I stated previously, a local industry would normally
pay 18 mills to the local school district.  From what I've read, this 18 mills is
eligible for abatement down to 9 mills.  The 6 mills going to the state can only
be waived by the state.  So, the net benefit to the school district would be on
the increase in taxable value multiplied by anywhere from 9 to 18 mills [that
assumes no abatement].   You would need to know what the taxable value of the
proposed plant would be to determine the actual benefit to the school district.

Normally, only homestead properties pay towards the "enhanced" millage so that
probably wouldn't be an issue either way.

I still don't know if bond millages are exempt or not -- if they are, this could
help pay off debt for building construction, improvements, etc.

Sorry for the confusion -- trying to make heads and tails of property taxes takes
a bit of sleuthing!

Andrew Mutch

Steve Bean wrote:

> 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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