Court weighing decision concerning Chevron tax money

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Published: September 14,2011

Tags: courts, energy, offshore drilling, oil and gas, taxes

JACKSON COUNTY — Pascagoula School District leaders said the double whammy of drastically reduced state funding and potential loss of revenue from major industry will cause home and business owners’ property taxes to go up.

Property tax is not going up this year, but the district said should they not prevail in a case being weighed by the Mississippi Supreme Court, that will definitely change.

In order for the school district to avoid such measures as job cuts, that could mean an increase of four to five mills each year for the next several years, board member Dan Marks said during a presentation this week.

An extra mill equals about $10 in annual taxes for each $100,000 of a home’s worth.

Stemming from a 2007 law, the dispute pits the school district and the city of Pascagoula on one side and Jackson County, Moss Point and Ocean Springs school districts on the other. It requires that tax revenue from expansions at Chevron and a new liquefied natural gas terminal be divided, based on student population, among all districts in the county. Pascagoula encompasses schools in Gautier.

Over two years, reductions in state funding and decreased Chevron and LNG revenue would take a $2.8 million bite out of school district revenue, Marks said.

Well over half is from the industrial expansions.

“We cannot sustain these losses,” board member Mike Concannon said.

The district and city appealed the law, but the appeal was denied by a Jones County judge. In July, the court granted both sides the opportunity to submit additional arguments.

Both sides did so and are awaiting the court’s decision.

Marks and Superintendent Wayne Rodolfich said the district and city have been cast in a false light — that of a greedy school district that doesn’t want to share.

“For two years we’ve seen revenue decreasing, and we’re not whiners, we don’t want to cry about things,” Marks said.

Several factors are at play, Marks said.

For one, he said, the estimated value of the Chevron and LNG improvements have been exaggerated.

Projects that have been estimated at several billion dollars in the end — once the value of one-time costs are taken out — have a value of less than $300 million, he said.

Rodolfich said that steep devaluation’s in property as the refinery consistently improves itself mean that money is, indeed, being taken away.

“That refinery that has been within this district for the last 40 years is now being depreciated down every time they replace equipment and claim obsolescence,” Rodolfich said. “The idea that you will retain full value of Chevron after 2007 is just not a true statement.”

Rodolfich said over the course of time, Pascagoula School District’s share of new revenue, which includes LNG, will drop from the 100 percent (of Chevron) it has today to 29 percent.

Marks said he feels that Chevron will essentially “replace itself” every eight years or so, meaning that more of its property will be phased out and no longer generate revenue for Pascagoula schools.

All the other districts in the county, meanwhile, stand to gain, shooting from no revenue in 2009 to an added $6 million of revenue this year, Marks said.

It all amounts to one thing, he said: “Pascagoula loses.”

Chevron, the area’s largest taxpayer, presented its largest-ever check to the county last year, $35.6 million, with $16.6 million going to Pascagoula School District and the rest to the county.

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One Response to “Court weighing decision concerning Chevron tax money”

  1. Court weighing decision concerning Chevron tax money | Mississippi PEP Says:

    [...] [Resent id=12652451 2011-09-16 15:03:49 from mississippipep] » Mississippi Business Journal: msbusiness.com/2011/09/court-weighing-decision-con…money [...]

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