In this article I would like to discuss three areas of school revenue, namely Rover pipeline money, the district’s Emergency levy, and property tax revenue. First let’s look at the Rover pipeline money, while local landowners have received payments for easement agreements, the school district has not received any money for the pipeline. I have been told that the pipeline needs to be fully functional before a value will be assigned to it, and that a value probably won’t be assessed on the pipeline any earlier than 2019. Since property taxes are paid a year behind, it would appear that no pipeline tax money would be paid to the school district until at least calendar year 2020.Estimates are that our district could receive between $1.8 million and $3 million in tax revenue in the first year that Rover has to pay property taxes. We have been forewarned that whatever dollar amount is paid in taxes in the first year will be the highest we ever receive, as the company will take measures to lower their future taxes paid. In other counties, the pipeline tax revenues have dropped by as much as 50% after the first year of collections.
On the surface it looks like the district will have a very generous revenue stream from the pipeline. So some individuals are questioning with the pipeline revenue coming in the future, why is the district trying to renew the Emergency Levy. I would use a scenario that if you knew you were going to be inheriting money in the future, and you wanted to make a major purchase with that money, but there was uncertainty over the amount you might receive and when you would receive it, wouldn’t you wait to make your major purchase until you actually received the money and know the amount? That is the similar scenario our district is faced with except it is about receiving property tax money. We know we are going to get the pipeline money, but we don’t know for sure when or how much. Therefore, we are not going to consider letting a tax levy expire until we really know what finances we will be receiving for the pipeline.
Our district is currently receiving $746,765 a year from an Emergency Levy that will expire at the end of 2018. If the levy is not renewed and we don’t receive pipeline tax money until 2020, our district will have lost $1.1 million dollars in revenue, which is a year and a half of collections, before we receive any money from the pipeline taxes. In addition, Henry County just went through a reappraisal. The net results of the reappraisal have our school district’s assessed valuation (the value of the property in our school district) decreasing by $16 million dollars. Due to this decrease in value, our district will lose $65,000 in property tax revenue starting in calendar year 2018. Prior to receiving any tax money from the pipeline, our district would lose $97,500, which is a year and a half of collections. If you add the lost revenue from not renewing the Emergency Levy with the lost revenue from our district’s reduction in value, our school district could lose a total of $1.2 million dollars in revenue prior to receiving any money from pipeline taxes. The pipeline money could just be replacing revenue that our district has lost.
There will be more articles about the amount of pipeline tax revenue coming to Henry County once it gets closer to Rover having to pay taxes. I would like the residents of the Patrick Henry School District to remember that when there are revenue numbers mentioned for Henry County, that the pipeline does go through areas that are not in our school district, so please don’t think that the Henry County pipeline revenue total is the amount of money that will be going to our school district. Furthermore, even with the pipeline that does go through our district, there will be other entities getting pipeline revenue. In addition to Patrick Henry receiving money, the following will also be getting money: Monroe and Richfield Townships, Henry County, Henry County Health Department, Henry County Senior Center, Henry County Board of DD/Hope Services, Henry County South Joint Ambulance District, Four County ADAMhs Board and the Four County Career Center.
The school board and administration have been good stewards of our tax money. The last tax levy approved for operating expenses was the Emergency Levy in 2012. This levy was needed to stabilize our district financially. After receiving the money and becoming financially stable, our district let a 2.45 mill operating levy expire at the end of 2015. It is rare that a school district lets an operating levy expire. I would point to this action as proof that our school board will make a fiscally responsible decision for our school district residents about maintaining current levies once we know for sure the pipeline tax situation.
If you have questions about the potential pipeline revenue or our school district in general, feel free to contact me at 419-274-4853.