Preble County has been thrust in the middle of two debates about solar panels in rural farm fields in our rural areas.
The first is the debate about the panels themselves. There are two projects proposed, 1,000 acres in Israel and Dixon Townships called the Angelina Project and 800 acres in Gasper and Washington Townships called the Alamo Project. Unfortunately, this is not a local decision, this is a decision that will be made by the Ohio Power Siting Board (OPBS). This board has a process and it has begun for the Angelina Project. Various governmental entities and a citizens’ group have filed motions to intervene. There was a public hearing conducted by the OPSB on April 30, where the people who haven’t intervened were able to give their thoughts about this.
There is another public hearing in mid-May in Columbus where witnesses will be called and cross-examined. After all of this, the OPSB will make its decision.
The second debate is about how these projects, if they go forward will be paying property taxes to the county. This is a local decision. Open Roads Renewable, the group working on these developments, wants the county to enter into a PILOT (payment in lieu of taxes) Project, which is set up in Ohio law. Open Roads is willing to pay up to $9000/Megawatt per year. For Angelina that would be $720,000 per year to the county. They don’t seem like this is a big deal. That leaves me scratching my head. We have commissioners very excited about that amount of money that this company is willing to pay to the county.
This is where we need some examination and explanation. Without a PILOT project, Angelina, if it passes, would be taxed at a utility rate. Here’s an interesting exercise— go to the Preble County Auditor’s website and type Dayton Power and Light into the search bar. There are 50 entries. You can look at the tax tab of each and see how much tax they pay. If you scroll down on that tax tab you can see how the taxes have went up over the year. They pay a lot of property tax! They are a utility. Now think about why this Angelina project wants to be a utility/energy project on the state level, but at the local level they want to be part of a PILOT (Payment In Lieu Of Taxes) instead of paying traditional utility property taxes. They are very willing to hand over $720,000 a year for this project instead of paying utility property taxes. Why? That number would never go up over the 40 years. It is my belief that the $720,000 over a 40-year lease is less than utility taxes would be on the property over the 40 years. The PILOT would exempt these properties from property tax for the term of the project! That would in effect slam the door on reevaluations that we all have to endure every three years.
So let’s talk about taxes. Taxes on a good day are very confusing. This is far from a good day and they are beyond confusing. After examining a public records request from the county auditor, I have learned some things.
According to Rick Hoffman, the Preble County auditor’s tax council, in an email from mid-February this year, there are three things that could happen. “1. The commissioners approve the (PILOT) exemption, 2. the commissioners deny the (PILOT) exemption and the projects die, 3. the commissioners deny the exemption and they still build the project.” This middle scenario left me wondering. Open Roads wants to do this project, so why would they let something like not being in a PILOT stop them? That made me think about why Open Roads is so quick to want to throw $720,000 at the county.
According to Shelley Wilson, Executive Administrator, Tax Equalization Division of the Ohio Department of Taxation, in a letter dated Feb. 14, 2019, the PILOT law has changed and while in the past there was $7,000/MW that was a mandatory payment that would go to where most of the property taxes on the exempted property went before it was exempted, that does not exist for solar projects put in place after Dec. 31, 2016.
There is another $2,000 discretionary money that the commissioners can also receive. In the past this $2,000 would go directly in the general fund for the county to use. Because this law has not been renewed, there is no requirement or allowance for a mandatory payment. It appears that the commissioners could ask for $9000/MW discretionary money and put that all in the general fund. Richard Hoffman in emails dated Feb. 15, 2019 and Feb. 22, 2019 backs this up.
When you read on in this Wilson letter, it goes on to say, “If a solar project locates to a county after that date (Dec. 31, 2016) and the board of county commissioners determines to collect a discretionary payment in lieu of the absent mandatory payment, whether or not the board can distribute those funds among the various taxing authorities in the county as a proper expenditure from its own general fund is not a tax matter over which we have any authority.”
Richard Hoffman states in his Feb. 15, 2019 email that “he is unsure of what provision of Ohio law would permit one political subdivision to ‘gift’ funds to another political subdivision. So there might be a problem with simply writing a check to ‘xyz Township’ ”
So if the County does collect money through a PILOT (and remember that it stands for Payment In Lieu Of Taxes) it doesn’t appear that it could be paid out to the groups that normally get the tax dollars. Why would we want a PILOT?
I don’t understand why these solar arrays are not just treated as a utility instead of doing a PILOT. If they are taxed as a utility, then we are sure all the entities that receive tax dollars will get the money they are owed. It is my understanding that nowhere in Ohio have we had an energy project that has gone with traditional utility taxing. I don’t understand why our commissioners are so excited about giving this gigantic tax break to people who just arrived in the county. Do we do this kind of long-term exemption for people who have businesses in the county who employ county citizens? Who provide services to County people? I don’t know of any.
Because of all of this, I encourage you to call the county commissioners, Chris Day, Denise Robertson and Rodney Creech if you have their phone numbers or call the county commission office and talk to or leave each commissioner a message telling them not to do a PILOT for either of these projects. If Open Roads Renewable wants to move into the county they can pay property taxes just like all the rest of us do.