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Governor Signs Bill Forming Commission to Evaluate Utility Property Tax

Bill Represents Significant Progress

                

support utility property tax reform

Utility property tax reform update – June 2018

House Bill 324 (HB 324), which will create a commission to study utility property tax reform, has been signed into law by Governor Sununu. The commission will begin its work to evaluate the current problem and proposed informed, reasonable solutions to assessing utility property value immediately.

This victory ensures that all voices, including those from utilities and municipalities, will have input and a say in the process. Thank you to all of our members who have voiced their support for utility property tax reform – this victory would not have been possible without you.

House Bill 1381, which we rallied support for earlier this year, has been tabled by the House. We don’t anticipate it moving any further this session.

While we’ve made great strides this legislative session, our work isn’t done yet. We’ll need the help and support of our members once the commission makes its recommendations in the fall. Sign Up to voice your support.

Why is utility property tax reform needed?

Over a six-year period, the Co-op has experienced a nearly 70% increase in the municipal property taxes we pay because a number of towns where we do business increased their assessments of the value of our property by enormous amounts. As a result of these increases, property taxes now account for 11% of the Co-op’s distribution costs. These property tax costs must be passed through to you the members.

For example, one town tripled the assessed value of the Co-op’s property in a single year. In another town, we added $2 million of property in 2015, yet our assessment went up by $8 million. In yet another town, our property valuation was doubled in 2014 and was increased by another 25% in 2015.

Because the tax bills from all towns where we do business are lumped together in our rates, all Co-op members pay a share of the taxes for all towns, including those that impose huge, unreasonable increases in how they value our property.  This makes power more expensive for everyone. We don’t believe that’s fair, and we don’t believe it’s good energy or tax policy.  A utility pole in one town should not be assessed at two or three times the value of an identical pole in the next town over, but that’s exactly what’s happening.

The Co-op is part of a statewide coalition working to make changes through the legislature that would bring fairness and consistency to the utility property assessing process.

Huge increases in some towns’ property taxes are impacting your bill. See how many towns are unjustly assessing NHEC real estate!

Why is HB 324 important?

Currently, municipalities use different methods to assess the value of utility property in their towns. As a result, the tax assessments placed on similar property can differ greatly from one town to another. For example, a transformer assessed at $100 in one town could be assessed at $300 in the next town over.

Because utility rates include a share of the taxes from all towns where we do business, all Co-op members end up paying when some towns over assess the value of our property, even if they don’t live in those towns.

HB 324 will create a commission to study utility property taxation; over the next six months, the commission will develop recommendations, which can then be used to create new laws to ensure consistent and reasonable property taxes.

The current process encourages some municipalities to drive up utility property valuations because they know the ultimate burden will be shared by residents in other towns, through higher electric rates. That ends up increasing electric costs for everyone, which is bad energy policy as well as bad tax policy.

But the work isn’t done yet. We’ll need the help and support of our members once the commission makes its recommendations in the fall. Sign Up to voice your support.