A 10-year fee-in-lieu agreement between Caledonia Generating and Lowndes County ends this year, meaning the company will pay full ad valorem taxes to the county beginning with the next fiscal year.
That power plant developer is not the only Lowndes County industry coming off a fee-in-lieu in the next three years. That means more money is coming for the board of supervisors and school district.
In 2015, the first phase of steel manufacturer Severstal Columbus’ 10-year tax exemption period will end. Wood product manufacturer Weyerhaeuser will pay full property taxes beginning in 2016. Caledonia Gas Storage’s 10-year exemption will also end that year.
Lowndes County Tax Assessor Greg Andrews said once the first phase of Severstal’s plant extension is over and mills stay the same as they are now (47.71 for county schools and 40.01 for the county), the county could see a yearly net gain of about $8,360,579.
The $1,862,005 in-lieu fee would go away for the supervisors’ budget, but they would receive $5,826,290 in ad valorem taxes, producing a net gain of $3,964,285.65. The $2,318,284 the company gives to the school district each year in in-lieu would transition to $4,636,568 in ad valorem, a net gain of $4,636,568, Andrews said.
That does not include the other seven smaller facilities on the Severstal campus, each of which would also transition from the exemption to paying full property taxes, he said. This would mean a net gain of $242,463 for supervisors and $289,429 for schools if millage remains as it is now.
The yearly net gain for the county when exemption ends for Weyerhaeuser would be about $477,120 for the schools and $427,000 for supervisors.
The schools would net $485,226 and the county would net $406,488 each year from Caledonia Gas Storage, which is a little more than double what the company pays in in-lieu currently.
Estimations on what the county stands to make when the exemptions end are calculated by multiplying the assessed value of the property by .04001 to find out the in-lieu fee, then multiplying the assessed value by three and subtracting the in-lieu.
Property taxes are calculated with mills. One mill is worth one-thousandth of a dollar. For example, if the millage rate is 20 mills, a property owner pays $20 for every $1,000 of assessed value on his or her property. The assessed value of a property is the appraised value multiplied by the assessment ratio (10% for residential properties). The owner of a property appraised for $100,000 in this example would owe $200 in taxes.
Municipalities, counties and school districts each establish their own millage rates to meet budgetary needs.
Nathan Gregory covers city and county government for The Dispatch.
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