Summary of Impacts on Highland County
- Few, if any, of the project’s temporary construction-related jobs would be filled by local residents. Most such jobs will be held by employees and contractors of the turbine manufacturer who are trained and experienced in the installation of this highly specialized equipment. Some jobs, such as earth-moving and/or grading jobs might be filled by residents of Highland County or other nearby areas.
- Few, if any, of the materials necessary to construct and equip the project would be produced or acquired in Highland County. A significant exception might be for acquisition of aggregate and/or fill material and possibly timber, if required.
- The project might result in one or two permanent jobs in Highland County for minor maintenance, monitoring and security for the project. This position(s) could be filled by someone residing outside of the County.
- The project’s ability to attract significant net new tourism and recreational outlays to the County is virtually zero.
- The project will be assessed for local real property tax purposes by the State Corporation Commission (SCC).
- The project’s ability to generate additional real property tax revenue to the County will depend upon: the “market value” and “stated” ratios, and depreciation schedule applied by the SCC, and the local real property tax rate to which it would be subject.
- The potential of the project to cause a reduction in real property tax revenue to the County will depend largely upon its negative impact on neighboring and nearby properties, and potential losses to the County’s recreational, tourism and hunting operations and enterprises.
- Based on current SCC practices, the amount of real property tax revenue that would be generated by the project would be highest in the first few years after construction, and would decline annually to some fraction of this amount in the last few years of its depreciation cycle.
- Based on a 20-year period depreciation cycle, an initial year taxable assessed value of about $32.6 million, and a local tax rate of $0.62 per $100, the project would generate an annual average of about $105,000 in real property tax revenue to the County. This amount could be somewhat greater if depreciation is significantly limited in the later years.
- Based on the foregoing, the net present value of the twenty-year real property tax revenue paid to the County over the depreciable life of the project would be about $1.5 million.
- These amounts would be offset by any loss in local tax revenues caused by: I) reductions in value of neighboring and nearby properties, ii) other economic losses to existing County businesses, and; iii) costs for the provision of County services to the project, such as Sheriff’s patrol (though these costs can be expected to be low).
- For a neighboring or nearby property with a current taxable assessed value of $100,000, a loss in value of 25 percent would cause a reduction in real property tax revenue of $155, annually. Over twenty years, the net present value of this loss is $2,230. A loss in value of 50 percent would cause an annual reduction of $310 annually which, over twenty years, represents a net present value loss of $4,456.
- For a combination of such parcels with a current taxable assessed value of $10.0 million, a 25 percent loss in value represents a net present value loss of $223,000 in real property tax revenue over a twenty year period. This amount would be double for a reduction in value of 50 percent.
- Because the County’s Local Composite Index is statutorily set, the amount of State assistance for local public schools would be unaffected by the project.
- A change in State statutes or regulations could cause local real property tax payments by the project to be lower than estimated herein.
- Aside from Sheriff’s patrol, the project would generate little demand for local County services.
- Since the project would generate few, if any jobs and new residents to the County, there would be little, if any, demand for additional services off-site.
Prepared by: Michael Siegel
Presented at the Highland County Wind Forum
Sponsored by the Chamber of Commerce of Highland County, Virginia
May 20, 2004
Download original document: “Economic and Fiscal Impacts of the Proposed New Highland Winds Project on Highland County, Virginia”
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