Wind energy pushes county tax value higher

April 24, 2014 by  
Filed under Green Energy News

HURON COUNTY — Agricultural and personal property values in Huron County have increased again for 2014, according to a report prepared by the county’s equalization director.

Taxable values on personal property have increased nearly 15 percent in 2014, Walt Schlichting told county commissioners Tuesday.

“A large part of that is due to the increase in personal property, which is a combination of wind generation and electrical transmission lines that have been built in the county,” Schlichting said.

Schlichting is the equalization director for Huron and Tuscola counties. Under state law, the equalization department works with the board of commissioners to advise and set property tax assessments throughout the county. 

Huron County’s total state equalized value (SEV) — which is one half of a property’s true cash value — increased by more than 17 percent in 2014 when compared to 2013 figures, Schlichting said. 

The personal property class again was the driving force behind land value increases, representing an 82 percent increase from $307 million in 2013 to $559 million in 2014.

A figure for how much revenue the county will see from the increases has not yet been calculated by the county treasurer’s office.

Last year, County Commissioner and Finance Chair Ron Wruble estimated the increase would result in about $700,000 more revenue for the county, representing a roughly 4 percent increase over the year before. 

“It did go up a lot as far as estimated revenue,” said Sherry Learman, county treasurer, of the anticipated revenue for 2014.

Additional revenue may be allocated to the county’s workers’ compensation and health insurance funds, Wruble said. It also may be used to increase the balance for the general fund, which totals $2.2 million. 

“All of those (funds) are reaching comfortable levels,” he said, adding that both the workers’ comp and health insurance funds are in the $500,000 range. “We’ve had the opportunity over the last several years to build those funds up while building the OPEB (Other Post-Employment Benefits) and MERS (Michigan Employee Retirement System).”

The county’s capital improvement fund also could benefit from increased funding. Wruble said a few projects around the county have been put on the back burner, including “a couple parking lots or a building improvement here and there.” Targeted lots include the parking lot for the county’s 911 services and a lot by the courthouse.

Wruble said he expected taxable values to rise, but was pleasantly surprised with the increases in this year’s report.

“I anticipated that personal property would be up because of the windmills,” he said. “Three or four years ago, that (report) looked pretty ugly. It’s encouraging not only from a tax paying point but the values of the properties in the county are appreciating in value.”

Residential property still has the largest share of total taxable value — the value used to calculate property taxes — at 41 percent. The figure is down from 47 percent in 2013. 

Personal property, however, accounts for 26 percent — up from 17 percent last year. Agricultural property also is at 26 percent, down 3 percent.

It was a point of interest for County Commissioner John Nugent.

“Personal, which is associated for wind primarily, is the same as agricultural — equal value,” Nugent said. “That’s interesting.”

Schlichting said he too found it interesting that for the taxable value, the agricultural class and the personal property have the same share of the total.

Nugent asked if it would hold true down the road.

“It will shift,” Schlichting said. “With personal property, we expect a decline in value over time. With agricultural property, we’ll continue to see some increase in taxable value as we get an inflationary increase every year. …

“How soon the shift happens is going to depend on when they stop building new wind projects, because at that point the value will only decline.”

Board Chairman Clark Elftman said the price of an acre of farmland in the county has continued to skyrocket.

“It has,” Schlichting said, adding that he had heard rumors that sale prices of farmland will taper off if commodity prices drop.

Commercial and industrial property class proportions remain unchanged from last year, at 5 and 2, respectively. The industrial property class saw a decrease from $37.5 million in 2013 to $33 million in 2014.

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