30-Year Tax Abatement Would Keep Millions From County
COLUMBIA – Fairfield County officials say they were alarmed
by a story in The State newspaper Monday announcing that the proposed sale of
state-owned utility Santee Cooper to Florida energy giant NextEra could deprive
many South Carolina counties and their schools, including Fairfield, of
billions in tax dollars over the next 30 years.
Santee Cooper is a publicly owned utility and, therefore,
does not pay property taxes. Should the for-profit utility NextEra purchase
Santee Cooper, which is likely, then Santee Cooper would convert to a
for-profit business and would, under normal circumstances, be required to pay
taxes. But a bill proposed by some state lawmakers would exempt the utility
from paying local property taxes to South Carolina counties and schools for a
period of 30 years.
For counties and schools throughout the state, according to
the proposed bill, that would amount to NextEra not paying as much as $200
million a year, or $6 billion over 30 years.
For Fairfield County it would mean missing out on millions annually
according to Fairfield County Administrator Jason Taylor.
“We were expecting an
additional $15 million or so annually if the sale goes through,” Taylor said.
“But if the proposed bill becomes law and NextEra ends up paying the same tax
rate Santee Cooper paid, that would be nothing, zero dollars for the county.
And not just the county, but our schools would also lose out tremendously.”
I can understand some kind of incentive associated with Next Era’s purchase of Santee Cooper, some kind of fee-in-lieu structure, but not a 30-year tax holiday.
Jason Taylor, Fairfield County Administrator
One former county official put it like this: while Fairfield
County citizens bear all of the risk of having a nuclear and gas plant within
its borders, which NextEra would partially own should the sale go through, the
county would get no additional property tax benefits (if the proposed bill
becomes law) to fund things like local schools, EMS, fire services, law
enforcement and other vital services, while NextEra chases profits.
The county has reportedly been negotiating for months with
NextEra on an incentive package for a gas fired plant that could potentially
bring millions to the county if the sale is finalized. But those negotiations
were predicated on NextEra purchasing Santee Cooper, thus converting Santee
Cooper to a private for-profit business that would pay taxes. If the proposed
bill becomes law, those taxes will not materialize for Fairfield County for 30
years.
Taylor said he’s read the proposed bill, but is not fully
informed yet about where it stands or how likely it is to be passed.
“But we have a message and we want to be sure our message is
fully shared with the state legislators,” he said. “We would possibly pass a
resolution expressing our feelings on this, but we first want to consult with
our local legislative delegation and, of course, with our county association
who helps us with lobbying.”
Taylor said the county still favors the sale.
“We feel the sale of Santee Cooper to NextEra will
definitely benefit Fairfield County with that billion dollar gas fired plant
they’re proposing to build,” Taylor said. “But we’ve been negotiating under the
assumption that if and when NextEra buys Santee Cooper, the existing nuclear
reactor would bring 45 percent of the additional tax revenue to the county.
“The county currently receives $32 million annually from
V.C. Summer’s operations,” Taylor said. “If the sale goes through and the bill
does not, that could bring another $15 million in tax revenue to us. I can
understand some kind of incentive associated with NextEra’s purchase of Santee
Cooper, some kind of fee-in-lieu structure, but not a 30-year tax holiday.
Hopefully, the state will counter the bill.”
