Plant closure could mean higher taxes

CARLTON - When the Kewaunee Power Station nuclear plant shuts down in May, the impact will be huge and long lasting. Not only will hundreds of people lose their jobs, but local governments will see a massive drop in tax revenue.

"The town of Carlton is left holding the empty bag. We have to come up with the money someplace," said Carlton town chairman David Hardtke.

Right now, Dominion, which owns the plant, pays local governments $1,000,070 in utility taxes on the power it generates. The payment is in lieu of property taxes.

Two-thirds of that money, about $713,000, goes to Kewaunee County. One-third, or about $356,000, goes to the town of Carlton. That money is just about the entire town budget. When it's gone, the town will have to levy a property tax to make up for it.

"It'll be a whole different way of life," Hardtke said.

But the tax payments won't go away right away.

"It would not just cease the day we cease operations. It's actually a gradual weaning of the tax," said Mark Kanz, local affairs manager with Dominion.

According to local and state officials, the company will make a full tax payment in 2013 and 2014. After that, the payments will drop 20 percent each year, until the tax is gone in 2019.

• Click here for an initial analysis from the state of how the utility tax will be phased out

"It's going to be very difficult on their budgets," said State Rep. Garey Bies (R-Sister Bay). He says local taxpayers will have to make up the difference, likely in the form of higher property taxes.

"For the town of Carlton of the county of Kewaunee, because of the lack of their subsidy that they've been getting, it's got to come from somewhere," Bies said.

Once the town creates a local property tax, the plant itself will be subject to it.

"How much is a decommissioned power plant worth?" asked State Sen. Frank Lasee (R-Ledgeview). Lasee says he wants to make sure the local governments to get some revenue on the property.

"We'd like to see something done," Lasee said. "I know we've worked on this over the years and yeah, it would be nice to see some type of payment at least for the town and the county so we'll work on that as well and yes, there's an impact. We're aware of it and want to change it."

Hardtke says the way it stands now, in order to figure out how much the plant would pay in property taxes, the town would have to pay for an assessment of the property. That could run anywhere from $30,000 to $250,000. Hardtke says hoping the state can help pick up some of that cost.