Northern Pass predicts financial windfall for townsBy MICHAEL COUSINEAU
New Hampshire Union Leader
May 27. 2017 10:04PM
Local property taxes from Northern Pass
|These figures are the midpoint estimates* of town and school property tax payments from Northern Pass in the project's first year of operation:|
|*-The midpoints are taken from a range of 11 estimated tax payments calculated with formulas involving cost allocations, tax rates, and projected tax rate increases.|
|Source: Northern Pass|
Northern Pass estimates it could provide more than a half-billion dollars in property taxes over its first 20 years operating, creating hope and doubts among local officials along its proposed route.
A Franklin committee studying how to allocate its share "was looking at this as a once-in-a-lifetime opportunity to make some dramatic changes to the community in terms of how resources are used," Franklin City Manager Elizabeth Dragon said last week.
Franklin could receive anywhere from $3.2 million to $7 million in additional local and school property taxes for the first full year that Northern Pass operates, according to project estimates.
"We know a significant portion of the new funding will go toward funding our schools," Dragon said.
The Franklin committee focused using money for schools, infrastructure, economic development and possible tax rate reduction, but "there was no full consensus" on the split, she said. Beefing up the town's tax base will cause some loss of state education aid, offsetting a portion of the Northern Pass gains, she said. Franklin also would benefit from a new $250 million converter terminal.
Laconia attorney Steven Whitley, who represents several towns opposing the project, including Pembroke, Deerfield and Littleton, said the project could adversely affect nearby property values, scenic views, tourism and the environment.
"For the towns I represent, it (the money) doesn't negate the negatives of the project," Whitley said.
If communities devoted 100 percent of their Northern Pass property tax revenues toward reducing taxes, Stewartstown taxpayers could see the biggest benefit, $830 per $100,000 assessed valuation followed by Franklin at $750, according to recently filed Northern Pass estimates. Bridgewater would see the least at $15 per $100,000 valuation.
Pembroke - whose voters oppose the project if built above ground as proposed - worries that the town won't reap as much as project officials suggest.
"It's a concern of everyone the values aren't that accurate," said Pembroke Town Administrator David Jodoin. "That's the sales pitch now and we'll start to see abatement (requests asking for reductions later)."
The estimates include several caveats, including actual project investments made in each town and the town's total valuation. Eversource, the parent company of Northern Pass, currently is pursuing in court abatements unrelated to Northern Pass to try and lower their property tax assessments and tax bills.
Northern Pass calculated estimated local property tax payments for the 31 towns that the transmission project would run through. Franklin would receive the most of any community while Bridgewater would get the least, between $41,398 and $64,586 the first full year.
Northern Pass said it would pay an estimated $35 million to $40 million in new property taxes in its first full year in operation, according to 2015 estimates that a project spokesman said still apply.
That includes approximately $21 million to $26 million in municipal and local education property taxes; $4 million in county taxes and $10 million in state utility education property taxes redistributed to local communities for education.
The proposed $1.6 billion project to bring hydropower from Canada into New England needs several state and federal approvals before it can start operating along the 192-mile route in late 2019 or early 2020. Project officials hope to garner all necessary approvals by the end of this year.
"All of those taxes will be paid in the first full year of operation," said Northern Pass spokesman Martin Murray. "Prior to that, as investments are made and recorded and assessed and taxes levied, there will be revenue received by the communities."
Over a 20-year period, Northern Pass estimated it would pay between $564 million and $692 million in property taxes. The town-by-town estimates don't include the state utility education property taxes that are included in the 20-year overall projection, Murray said.
"The project's investment in the communities and the accompanying tax revenues will be transformational," Murray said. "For many of the communities through which the project passes, the increased revenue will be significant. It will be up to each city or town to decide whether to use those revenues for property tax relief, to pay for projects or services, or a combination of both."
Eversource, he said, is the largest property taxpayer in the state, paying $80.7 million in property taxes last year.
New Hampshire customers won't pay for the Northern Pass project, Murray said. Eversource is paying for the project, including local property taxes.
"Northern Pass is responsible for financing and constructing the project and will then recover its costs, once the project is in service, through the use of the line," Murray said.
Northern Pass officials and project opponents disagree over how to calculate how much Northern Pass should pay in property taxes as well as whether the project would lower property values of homes in the immediate vicinity of electrical towers as high as 140 feet or more.
Under the straight-line depreciation method Northern Pass used to calculate valuation, the figure would decline or depreciate every year, giving communities less money every year if all other things were equal.
Northern Pass has sent letters to 29 of the 31 affected communities (excluding the unincorporated towns of Dixville and Millsfield), looking to reach an agreement on property taxes.
"As with other communities along the proposed route, Northern Pass is willing to offer a tax agreement to your town to provide further certainty regarding tax payments and avoid potential tax abatements in the future," said a Northern Pass letter to Allenstown selectmen in February.
That letter estimated Allenstown's portion at $611,814 for 2019, dropping to between $388,048 and $467,931 in year 2038, cautioning that was an estimate subject to change.
Allenstown Town Administrator Shaun Mulholland said town officials are willing to work with Northern Pass officials but won't assess the Northern Pass towers based on "some artificial agreement."
Murray said the tax agreement "might be aimed at aligning the payment of taxes over a certain period of years in a manner that will help pay for a critical project. This could occur based on the agreed estimate of taxes the project will be paying to the community over the years."
He said Northern Pass also has guaranteed a "tax pledge" that it would not seek abatements on assessments that are based on a standard depreciation schedule that the project has used to estimate tax payments.
Northern Pass hearings resume Wednesday before the state's Site Evaluation Committee.