Duke decision costs district $334,000

Ohio tax commissioner Richard Levin has informed the New Richmond Exempted Village School District that it has awarded Duke Energy a 20 percent reduction in the taxable valuation of generating equipment at its Beckjord generating plant equipment.

“Although the decision could have resulted in a $1.4 million loss to the New Richmond Exempted Village School District, we will lose $334,432 annually,” said New Richmond chief financial officer Teresa Napier.

Duke, which had asked for a 40 percent reduction in the valuation of its generating facilities along with its transmission and distribution equipment, has 60 days to appeal the Beckjord decision, and has re-filed its request for a 40 percent reduction in the taxes it pays on its transmission and distribution equipment for the current tax year.

Napier said the district does not have legal standing to fight Duke’s appeal. Clermont County Auditor Linda Fraley is meeting with the Clermont County prosecutor to determine the county's position on filing an appeal.

“This is just one hurdle in a long process, with Duke being able to appeal the tax commissioner’s decision to the Board of Tax Appeals and ultimately to the Ohio Supreme Court.,” said Napier. “This case must be closely monitored, as it could continue to negatively impact the district’s budget.”

The reduction lowers the valuation of Duke’s Beckjord plant from $40.7 million to $30.2 million.

“Our district suffered the largest loss in the State of Ohio,” noted Napier.

“I think that we can assume that this reduction in the value of generating equipment will continue for tax year 2010 and beyond,” said New Richmond superintendent Adam Bird, who has been studying ways to cut the district’s budget and raise revenues in anticipation of losing $8.1 million a year in 2017 when the state ends its electrical deregulation payments to New Richmond and other districts with electrical generating facilities.

The loss of $334,000 from Duke is the first of what is expected to be a string of bad financial news for New Richmond this year.

Ohio Governor John Kasich has said he will make up an estimated $8 billion deficit in Ohio’s next biennial budget with across the board cuts. Schools have been told to expect between 10 and 20 percent cuts in state foundation payments, from which New Richmond receives $4 million per year.

That means a loss of between $400,000 and $800,000 for next fiscal year which begins in July.

New Richmond's 2010-2011 expenditures total $25,331,121.

“There are no frills when it comes to educating our children, but you have to start putting a weight on some services we currently offer,” said New Richmond school board president David Painter. “The board was already looking at reductions in services and now we’re faced with losing $1.1 million this year.”

The school board meets Thursday, Jan. 20 at 7 p.m. at the board office, 212 Market Street.