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Counties wary of utility tax plan

The House proposal could help companies that run nuclear power plants, but it could take millions in revenue from some counties.


© St. Petersburg Times, published April 22, 2000

TALLAHASSEE -- When describing their $500-million tax break package, House Republicans use words like "family friendly" and point to tax cuts for regular Floridians and "mom and pop" stores.

But buried in the package is a potentially huge tax break for a politically powerful big business interest: the utility companies that run the state's three nuclear power plants.

If it is signed into law, counties could lose in excess of $30-million in annual property taxes, according to a study by the state's property tax appraisers. Dozens of counties stand to lose, but the hardest hit would be the three Florida counties where nuclear plants are located: Citrus, Miami-Dade and St. Lucie.

Property owners in those areas could see their property taxes rise to make up for the lost revenue or see steep budget cuts to schools and other local services.

"Everyone in the state, every property tax payer, should be concerned about this," said Bill Suber, who tracks legislation for the Florida Association of Property Appraisers. "This is a break for a very narrowly defined special interest."

The big winners in the deal are Florida Power & Light Co. and Florida Power Corp., which own Florida's nuclear plants. TECO Energy Inc. and Gulf Power Co. could also benefit to a far lesser extent from a separate provision in the proposal, according to Jim Pence, the property appraisers' expert and a former FPL employee who used to help the company find ways to trim its property taxes.

The proposal is not in the Senate's tax cut package, but it blasted through a House committee earlier this week unanimously and without a word of debate. Unlike most pieces of legislation considered in Tallahassee, no staff analysis was done to calculate the fiscal impact to the counties. And none of the counties had a chance to oppose the measure.

"I had a card to speak, but they never called on me," said Larry Levy, a lobbyist who represents property appraisers. "It was zip, zip, get it out of there. Somebody powerful is pushing this."

That someone is Rep. Ken Pruitt, the chairman of the powerful House Appropriations Committee and a Republican from St. Lucie County, where the property appraiser is so outraged over the provision he is calling it the "FP&L Relief Act."

Pruitt said Friday he never intended to cut property taxes or hurt his own county.

"I was only striving to find a uniform way to assess electric plants -- every year, the school board in my county has to wait to do their budget while the property appraiser and the company fight in court over what the exact value is," Pruitt said. "But if what the property appraisers are saying is true, I'll be the first one to strip that language off."

FPL is the prime backer of the proposal; spokesmen for other companies say they are watching it but have not studied the impact. The companies argue that counties are unfairly overcharging electric utilities for tangible property such as electric plants and transmission lines.

Based on the companies' own figures, each property appraiser currently figures out the statewide market value of each electric company's assets. Then, using an allocation formula, the property appraiser determines the amount of that statewide value that is taxable in his or her county.

"Different people are using different allocation formulas. The tendency is for the property appraisers to use the formula that most benefits them," said Victoria Weber, FPL's lobbyist. "You never know how your property taxes are going to come out, and businesses want consistency."

The company has sued eight counties over their methods of assessment, according to the property appraisers. The bill moving through the Legislature would essentially resolve many of the disputed issues in the company's favor, according to Pence, the property appraiser's expert.

The proposal affects a huge pot of money that utility companies have collected from their customers and are required to set aside to pay to restore their property in the event one of their nuclear power plants is decommissioned. Property appraisers see the money as an asset that is taxable. Under the proposal, the utility companies would be allowed to deduct it from their taxable assets.

A separate provision would mandate a specific formula for property appraisers to distribute the taxable value of electric companies among counties. The property appraisers say the change will have the effect of taking some now-taxable assets, such as older plants and transmission lines, off the books.

The utilities say this provision does not amount to a tax cut, but rather changes the way that the money is distributed among the counties. "The size of the pie stays the same -- it's how you split it up," said FPL spokesman Bill Swank.

But Pence said that overall taxable value would be reduced. And counties remain concerned.

Citrus County Property Appraiser Ron Schultz estimates that taken together, the two provisions would mean a drop in tax revenues of at least $1.8-million in his county alone. "This has the potential to be a major hit," he said.

Even counties with no nuclear plants are troubled by the bill.

"Tampa Electric is the largest single taxpayer in Hillsborough County," said Warren Weathers, Hillsborough's chief deputy property appraiser. "We're watching this."

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