January 13, 2011

County loses $50,000 in tax revenue due to legislative action

County loses $50,000 in tax revenue due to legislative action
With a long history of development in the background, the state legislature unanimously approved a re-distribution of property taxes for rural electric utility cooperatives (RECs) to fall in line with the other investor-owned utility companies.
According to Terry Traynor, North Dakota Association of Counties, the difference in taxation between the two forms of electric suppliers, “became increasingly problematic for a number of co-ops to remain viable and these finally convinced the legislature to realign their tax structure based on a fived amount per kilowatt hour of sales, rather than the ever-increasing gross receipts.”
In a long discourse of information and surrounding situational items, Traynor outlined what had happened to resolve the issue of the co-ops (RECs) giving 70 percent of their revenue to jurisdictions that contained less than 10 percent of their customers. “Though requested repeatedly to provide a county-by-county analysis of the expected impacts, the RECs said that it was impossible to tell… The sponsors of the bill were the Chairman of the House senate Finance and Taxation Committees, the Speaker of the House, Senator Klein, and two senior Democrat legislators. Traynor noted that this was “on a rail” from day one, citing another person’s opinion, not his own.
Since a return to the old taxation method and repeal of the law is not possible at this time, the counties with sparse population and many miles of electric service are losing a huge portion of their revenues and affecting their budgets for the next year to an extreme.

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