Thursday, December 06, 2001

School: Abatement should go

Cinergy doesn't qualify, Edgewood says

By Sue Kiesewetter
Enquirer Contributor

        TRENTON - Edgewood school officials are not in favor of the Butler County commissioners transferring a 1999 tax abatement on the Woodsdale power station from Duke Energy to Cinergy, which purchased the plant this year.

        In a Nov. 21 letter to commissioners, Edgewood Superintendent Tom York said the schools agreed to the 10-year, 90 percent abatement of property taxes in the interest of economic development. Construction of the facility hinged on the abatement and incentives offered at the time, he said.

        But those conditions no longer exist, Mr. York said.

        “We do not think they are entitled to the tax abatement,” Mr. York said. “It was set up to encourage new businesses and new jobs, not the acquisition of an existing business by another existing business.”

        For Cinergy to benefit from the abatement, the commissioners have to vote to transfer it. That has not yet happened.

        Cinergy officials said they have agreed to abide by all the conditions in the original abatement Duke agreed to and would like it to transfer.

        “We continue to believe that tax abatement was an important element in the creation of the Madison project and continues to be an important element for us going forward as the new owner,” said Cinergy spokesman Steve Brash. “... We're very hopeful that the county commissioners will approve the transfer of the tax abatement to Cinergy from Duke.”

        With the abatement, the Edgewood Schools would receive $218,000 annually on the 10 percent of the Duke property not abated, said Edgewood treasurer Ryan Slone. Without the abatement, the Edgewood Schools would receive a net addition of $1.1 million in property taxes after factoring in reductions from the state school funding formula, Mr. Slone said.

        The abatement agreement also provides for a $680,000 payment to the Edgewood Schools in 2002-2004, Mr. Slone said.

        “When we were offering (the abatement) to Duke it was a deal breaker. It was an inducement to locate here (instead of Indiana),” County Commissioner Mike Fox said. “In that circumstance, that was the right decision. We did win out over Indiana. What obligation — if any — do we have to subsidize the purchase of the plant now by Cinergy?”

        Mr. Fox said he would like to talk further with Cinergy and fellow commissioners to see if the same abatement offer should be extended or if a different agreement could be reached.

        “There are more elements we want to look at. We want to make sure the schools are whole,” said Commissioner Chuck Furmon.


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