Tax breaks pull power plant into area, says assessor

JACKSON, Mo. -- A proposed power plant won't be built in Cape Girardeau County without millions of dollars in tax breaks, Cape Girardeau County Assessor Jerry Reynolds said Wednesday.

Kinder Morgan Power Co. has promised to pay $13.5 million in payments to a rural school district and other tax-funded entities over the next 15 years. In return, the Colorado-based energy firm wouldn't pay any real estate or personal property taxes during that time, resulting in a net savings of $3 million, Reynolds estimated.

The county commission would issue bonds to construct the $300 million plant in southwest Cape Girardeau County, and Kinder Morgan would pay off the bonds over 15 years. Once the bonds are paid off, the power plant would go on the tax rolls.

Without tax breaks, Reynolds said, the electricity-generating plant would have to pay an estimated $1.1 million in real estate and personal property taxes annually, or $16.5 million over the first 15 years of operation.

Reynolds said developers would be looking to build the plant elsewhere if it weren't for the tax breaks.

"There has to be something there or they are not going to do it," he said.

Tax breaks, he said, are key to recruiting new industry.

Bonding with county

Kinder Morgan's John Gibson said the company had looked at other possible locations for the plant in Missouri. The Cape Girardeau County Commission offered bonds, said Gibson, site development director for the company.

Kinder Morgan has proposed building a 550-megawatt plant on Route U near Crump, Mo. The plant would generate electricity with natural gas-powered and steam turbines.

The project has been held up by the Missouri Department of Natural Resources, which has refused to issue a permit without design changes to reduce smog-producing emissions. Kinder Morgan officials insist the proposed plant won't pollute the air. The company has appealed to the Missouri Air Conservation Commission to grant the permit.

The appeal is still pending five months after the DNR officially rejected plans for the power plant. An administrative law judge is scheduled to hold a hearing on the appeal April 16. The judge then will make recommendations to the Air Conservation Commission, which will make the final decision.

Kinder Morgan officials say talk of payments and taxes is premature.

"Until we get this air permit wrapped up, it's just talk," said Rick Rainey, a spokesman for the company's corporate office in Houston, Texas.

Without a state permit, the company can't build the plant.

Among local governments, the Delta School District stands to benefit most financially if the plant is built. The rural district, which has an enrollment of 315 students, would receive $9.42 million in payments over 15 years from Kinder Morgan.

The money would go to the school district's fund-raising foundation so it won't count against the school system in the state-aid formula.

Once the district goes on the tax rolls, the district stands to gain about $800,000 in annual tax money. But with a drop in state aid under the funding formula, the net increase would be $400,000 or less, school officials said.

Reynolds said the financing plan will benefit the school district.

'Wonderful things'

It also will benefit the Whitewater Fire District, which would receive an estimated $780,000 in payments over 15 years. That's close to what the district might receive in real estate and personal property taxes if the plant were immediately put on the rolls, Reynolds said.

The assessor said the plant could generate $50,000 or more a year in real estate and personal property taxes for the fire district once it goes on the tax rolls.

David Blumenberg, president of the fire district, said it makes little difference to the volunteer fire department if the money comes from payments stipulated in a bonding agreement or from taxes.

The fire district, which serves the communities of Crump, Whitewater and Allenville, operates on a budget of about $30,000 a year. The money comes from a tax levy. But it's barely enough to pay the bills for a department that maintains seven fire trucks and two stations.

Taxes from the proposed power plant would more than double the fire department's annual budget.

"With that kind of money, we could do wonderful things," Blumenberg said.

mbliss@semissourian.com

335-6611, extension 123