Ameren trying to game system, forgo $20M in taxes owed

Ameren likes to portray itself as a good corporate and community citizen. Why, then, has its board of directors chosen to drag out the multiyear legal battle against 16 counties in Missouri related to the valuation of its locally-assessed gas distribution system? At stake is an estimated $20 million in tax revenue that has been held in escrow from public schools, libraries, roads and bridges, fire protection districts, sheltered workshops, health and senior services and other public services in those counties. Cape Girardeau County's share of those embargoed tax dollars will be nearing $2 million this year.

Beginning in 2013, assessments of gas distribution properties were appealed by Ameren because multiple county assessors refused to accept significantly lower valuations in their jurisdictions. It is a complex case, but simply put, Ameren is arguing that their real property assets should be valued and assessed using accelerated depreciation methodology rather than be valued at market value like every other residential and commercial taxpayer in the State of Missouri. This is contrary to state law, and if Ameren prevails, their reduction in taxes could potentially be shifted to all other taxpayers in the county.

Sixteen of the affected counties formed a mutual defense fund to fight the reduction, and to date have spent roughly $2 million fighting Ameren to get those funds released to schools and other critical county services. The irony is that if Ameren prevails and counties are forced to return part of the escrowed funds, the taxpayers will not see a dime of that refund. Any refunds given back to Ameren go straight back to their bottom line as a windfall, most likely in the form of bonuses to company executives.

The counties won every appeal (local boards of equalization, state tax commission appeals, and circuit court decisions} until it reached the court of appeals. A very flawed court of appeals decision forced the counties to appeal to the Missouri Supreme Court, which refused to hear the case and remanded it back to the State Tax Commission for a final determination. The State Tax Commission ordered mediation in advance of a scheduled rehearing, which the counties have faithfully participated in. A sincere effort at settlement was made by the counties and was tentatively agreed to by both parties. Ameren's board of directors rejected the offer when it was presented by their legal counsel, and the rehearing is scheduled for September.

Adding insult to injury, this year the Original Assessment Division of the State Tax Commission justified a statewide reduction of roughly $172 million in assessed valuation of Ameren's electric distribution segment for 2018. (This is the portion of the company that is assessed by the state, rather than assessed locally, and is in addition to the reduced county valuations currently being litigated.) This reduction was made by the State Tax Commission despite, according to their most recent SEC filing, Ameren enjoyed an increase in earnings over last year in every division. Cape Girardeau County's share of the state's $172 million valuation reduction is nearly $3.8 million. How can a valuation reduction in Cape Girardeau County be justified after Ameren recently completed over $80 million in new construction and upgrades to their electric transmission assets in our area? Tax rates for 2018 have not yet been set, but this could mean a reduction in taxes to Cape Girardeau County taxing authorities of around $200,000. Who will make up the difference in this reduction? Ultimately, every other taxpayer in the county could be affected as levies are adjusted to make up for the shortfall.

Is Ameren big? Yes. Is Ameren a critical utility to the citizens of Missouri? Yes. Does Ameren deserve to be assessed differently than every other taxpayer in Missouri? Absolutely not. As your elected County Assessor, I have committed myself to fair assessment of all our taxpayers, and I cannot be silent about what I perceive to be unfair partial treatment of this publicly-regulated monopoly.

Ameren's influence in this state seems to have no limit. The legislature recently passed Senate Bill 564 that reduces public utility oversight by the Missouri Public Service Commission in exchange for a "promise" that they will upgrade the state's electrical grid. Critics argue that passage of Senate Bill 564 makes it easier for power monopolies to raise rates and could give advantages to large power users and penalize smaller users. The true cost versus benefit may not be seen for some time. Although consumers were recently notified of a small reduction in rates which will no doubt be touted as an altruistic move by Ameren, it was a direct result of federal tax reduction policy. To be sure, it was not the result of any benevolence on the part of Ameren.

Why is Ameren being allowed these de facto tax abatements and rate-setting advantages? Is it because Ameren is one of the largest contributors to political campaigns in Missouri? If so, it is time for accountability. Call your legislators. Let them know how you feel about the influence publicly regulated power monopolies have on lawmaking in Missouri and ask them to review the State Tax Commission Original Assessment Section's recent attempt to "assess, adjust, and equalize" Ameren's centrally assessed properties. Call Ameren's CEO, Warner Baxter, and let him know how you feel about Ameren's battle against fair assessment of the company he leads.

Bob Adams is the Cape Girardeau County Assessor.