As part of the package to entice Duke Energy to build its new power plant here, county officials way back in 2005 offered tax breaks to the company totaling some $64 million, including tax abatement on the plant, which was then estimated to cost $1 billion.
This month the plant, now valued at around $3.3 billion, officially went online, meaning that tax abatement will kick in causing a drop in assessed valuation within the North Knox school district.
However, it won’t be as drastic a drop as first thought.
Yvette Kirchoff, a partner in the Vincennes law firm of Kolb Roellgen & Kirchoff which represents Duke locally, this week explained to members of the county council that only a part of the plant will actually qualify for tax abatement this year.
What’s referred to as the tower block, which is basically the most-visible section of the plant and valued at almost $1.8 billion, will come off the tax roll this year.
The rest of the plant, included the section that actually develops the synthetic gas used to fuel the generators and produce electricity, will remain on the tax roll.
Next year, that will come off while 10 percent of the tower block will be added back.
The abatement is the standard 10-year process in which during the first year the qualifying property’s value for taxing purposes is zero, to be incrementally increased over the course of the abatement until the full value is taxed.
Kirchoff reminded council members that even with the abatements taking effect Duke Energy will continue to be the largest property-tax payer in the county.
Removing the property from the tax roll will have an impact on property taxes in the school district as well as Vigo Township.
The reduction in assessed valuation will mean a higher tax rate will be needed to raise the money the school and township need.
Darrel Bobe, superintendent of at North Knox, was glad to hear that the abatement was actually going to occur in two phases.
He said if the whole plant were to come off the tax roll at one time, it would be hard for the school corporation to raise the property-tax money it needs without bumping into the tax caps that are now part of the state constitution.
That the abatements will be staggered means that in all likelihood isn’t going to happen.
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http://suncommercial.com/articles/2013/06/15/news/local_news/doc51bd1c600c91d508318076.txt
