Legalectric

Letter: Will Xcel deal preserve our fair share?

Carol Overland, Red Wing, The Republican Eagle

Published Saturday, November 11, 2006

To the Editor:

Decades ago, NSP built the Prairie Island plant, and it was welcomed in large part because of the economic benefits.

Tax revenue for this plant has been slashed by over 60 percent in the last decade. What happened to that deal?

There’s a new utility personal property tax deal between Xcel, Goodhue County and Red Wing. Is this a good thing? I’ve represented clients who’ve successfully preserved their tax base. I’ve also represented parties regarding NSP/Xcel deals because my clients suffered consequences, i.e., the “stick it to Goodhue County” nuclear waste in Florence Township, the Chisago transmission line redesigned at twice the capacity originally proposed, the TRANSLink deal and its codification as the 2005 Transmission bill which brings three 345kV transmission lines to Red Wing. I’m skeptical of any deal.

Utility personal property tax is an arcane tax paid by all utilities owning infrastructure to all local governments across the state. All jurisdictions are affected by the 60-percent tax rate cuts.

These cuts were a peripheral issue in the campaign: Candidates were asked about the dwindling tax base, but not what they would do to restore revenue. Only one spoke about her successful experience in negotiating with the utility. Potential solutions range from influencing the Department of Revenue rule change; stepped restoration of utility tax rates; production tax on all generation; elimination of blanket exemptions coupled with a Host Fee Agreement. Local governments must act in concert. Will they?

That’s my concern. This community has been held hostage by a “good neighbor” utility which showed its appreciation for the 1994 lobbying effort “to protect the tax base” by gutting that base as local governments cower. What’s encouraging is that there’s recognition that it’s time to protect our interests. What’s Xcel going to do if challenged, take its nuclear plant and go?

Those working on this deal have pledged to act to protect the tax base and made strenuous assurances that this deal is premised on legislative change. This deal is “a floor, not a ceiling” to preserve the status quo while legislative efforts go forward. That’s reasonable to restore the diminishing tax base, whether legislatively, administratively, or legally, is to enforce the original premise. We’ve got to support local government in its fight to preserve our fair share.

Carol Overland
Red Wing