30-Year Tax Abatement Would Keep Millions From County
COLUMBIA – Fairfield County officials say they were alarmed by a story in The State newspaper Monday announcing that the proposed sale of state-owned utility Santee Cooper to Florida energy giant NextEra could deprive many South Carolina counties and their schools, including Fairfield, of billions in tax dollars over the next 30 years.
Santee Cooper is a publicly owned utility and, therefore, does not pay property taxes. Should the for-profit utility NextEra purchase Santee Cooper, which is likely, then Santee Cooper would convert to a for-profit business and would, under normal circumstances, be required to pay taxes. But a bill proposed by some state lawmakers would exempt the utility from paying local property taxes to South Carolina counties and schools for a period of 30 years.
For counties and schools throughout the state, according to the proposed bill, that would amount to NextEra not paying as much as $200 million a year, or $6 billion over 30 years. For Fairfield County it would mean missing out on millions annually according to Fairfield County Administrator Jason Taylor.
“We were expecting an additional $15 million or so annually if the sale goes through,” Taylor said. “But if the proposed bill becomes law and NextEra ends up paying the same tax rate Santee Cooper paid, that would be nothing, zero dollars for the county. And not just the county, but our schools would also lose out tremendously.”
I can understand some kind of incentive associated with Next Era’s purchase of Santee Cooper, some kind of fee-in-lieu structure, but not a 30-year tax holiday.
Jason Taylor, Fairfield County Administrator
One former county official put it like this: while Fairfield County citizens bear all of the risk of having a nuclear and gas plant within its borders, which NextEra would partially own should the sale go through, the county would get no additional property tax benefits (if the proposed bill becomes law) to fund things like local schools, EMS, fire services, law enforcement and other vital services, while NextEra chases profits.
The county has reportedly been negotiating for months with NextEra on an incentive package for a gas fired plant that could potentially bring millions to the county if the sale is finalized. But those negotiations were predicated on NextEra purchasing Santee Cooper, thus converting Santee Cooper to a private for-profit business that would pay taxes. If the proposed bill becomes law, those taxes will not materialize for Fairfield County for 30 years.
Taylor said he’s read the proposed bill, but is not fully informed yet about where it stands or how likely it is to be passed.
“But we have a message and we want to be sure our message is fully shared with the state legislators,” he said. “We would possibly pass a resolution expressing our feelings on this, but we first want to consult with our local legislative delegation and, of course, with our county association who helps us with lobbying.”
Taylor said the county still favors the sale.
“We feel the sale of Santee Cooper to NextEra will definitely benefit Fairfield County with that billion dollar gas fired plant they’re proposing to build,” Taylor said. “But we’ve been negotiating under the assumption that if and when NextEra buys Santee Cooper, the existing nuclear reactor would bring 45 percent of the additional tax revenue to the county.
“The county currently receives $32 million annually from V.C. Summer’s operations,” Taylor said. “If the sale goes through and the bill does not, that could bring another $15 million in tax revenue to us. I can understand some kind of incentive associated with NextEra’s purchase of Santee Cooper, some kind of fee-in-lieu structure, but not a 30-year tax holiday. Hopefully, the state will counter the bill.”
