Wednesday afternoon, things moved a little more towards Cassville's way in Madison, as the State Senate voted unanimously on SB 252, which will extend utility revenue payments to municipalities after the power plants those communities host shut down.
“We are both pleased to see such swift action on Senate Bill 252, which helps to alleviate some reductions in state aid payments to Cassville and Grant County due to the closing of the two plants in the village,” State Senator Howard Marklein, one of the sponsors of the bill, stated after the vote.
The bill - SB 252 in the State Senate, AB 335 in the Assembly - is designed to clean up language in state statutes dealing with power plants which are being closed. Under current statute, those plants that are being closed see the amount of utility revenue paid to them reduced over a five-year period. The Wisconsin Department of Revenue, which interprets the statute, believes this wording only deals with decommissioned nuclear and wind power facilities, not coal and biomass plants like the Nelson Dewey and Stoneman facilities, each of which are slated to close sometime before the end of 2015.
That loss would compound the problem the community already has to deal with. “By the end of the year, two power plants located in the Village of Cassville are scheduled to close. The closures mean the loss of over 90 good-paying jobs. This is a huge blow to the community and the families that rely on those jobs,” Travis Tranel, a sponsor of the Assembly version of the bill said.
Things appear to be positive in the Assembly as well. On Wednesday the Assembly Committee on State Affairs and Government Operations spent an hour reviewing the provision before sending it to the floor of the full chamber, 31-0.
The unanimous vote in the committee echoed what took place last Thursday, when a contingent of seven people from the Village of Cassville and Grant County attended a special hearing of the Wisconsin Senate Committee on Government Affairs and Consumer Protection.
The local residents and officials wanted to emphasize what the closures would mean to the village, which would see a loss of $526,076 in revenue, if it were to lose those payments. With a budget of $1.1 million, the loss of revenue would mean a drastic series of cuts in services and staff.
There was a bit of a reprieve for the village, which was told it would receive the payment for the Nelson Dewey Station ($257,067), but that would be only for 2016 - the payment would disappear in 2017.
For Grant County, which received payments totaling $263,038 for 2015, the loss of the payments would mean an 11 percent reduction in the county budget.
The bill was fast-tracked, having been formally announced a day before the hearing, because of a tight timeframe to be effective. The legislation needed to be adopted by Oct. 1 in order to be reflected in the November payments to municipalities and counties. If it were to be approved and signed into law after that, the communities would notice a payment until August 2016.
Initially the bill was sponsored by state senators Frank Lasee and Howard Marklein, with cosponsors state representatives Joel Kitchens and Travis Tranel on the Assembly side.
The bill was introduced by Lasee at the hearing, and a group from the village which included Village President Keevin Williams, Clerk-Treasurer Marlene Esser, City Attorney Daniel Glass, and Public Works Director Mark Bartels talked about the impact no change would have on their community.
“Without this bill being passed, we will be looking at a 70-80 percent cut of employees, elimination of capital improvements,” Williams told the committee.
“Services will be gone, employees gone, equipment gone,” Glass followed up.
A group from the county, headed by Chair Bob Keeney, accompanied by Treasurer Louise Ketterer and Corporation Counsel Ben Wood, gave the county’s perspective.
“We will take a big on the services we can provide,” Keeney told the committee, noting the 11 percent number. “Its about consistency of services we can supply.”
“The phase out process allows us to not have a huge hit at one time,” Wood added.
Under the proposal, payments would be reduced by 20 percent each year after a plant is closed. Another part of the bill also removes language that caused any utility revenue payment to be reduced based on property taxes paid by a property owner.
Department of Revenue representative Nate Ristow told the committee explained the second part of the bill cleaned up language which counted those property taxes as new revenue, which was not the case because the taxes did not increase the local municipality’s revenue cap. He also explained the need to complete this before the Oct. 1 deadline or it would mean a delay for those communities affected.
“We realized we may have an issue that is going to grow across the state,” Ristow said.
During the discussion, State Sen. Bob Wirch, who is part of the committee, wondered if opening the interpretation to all power plants, and not just wind and nuclear as the Department of Revenue reads the statute now, would open the door for other communities.
Another, State Senator Devin LeMahieu, wanted to make sure the bill did not apply to facilities which saw one generating station shut down, but were still in operation. Only plants completely closed would be eligible.
After some discussion, the committee approved the bill to move forward, 5-0.
After the hearing last Thursday, the local contingent was happy with the bill moving forward, but knew there was more work needed.
“As quickly as it took place you never know there is going to be opposition,” Williams said, who noted the efforts of Marklein and Tranel in working the past few weeks on the development of the bill. “They were instrumental in getting this put together quickly.”
While none of the other communities had representation at the hearing, Keeney felt it was important to be there, putting a face to the issue.
Esser said that they would be making more trips to the capital for this issue. “I think we need to come back.”
Even if the bills is approved by both houses of the legislature, the bill would not solve all of either the village’s or the county’s problems. Even though the property would be placed on the tax roll once it is no longer used by the utility, the local governments would not be allowed to increase their state-imposed revenue caps because the properties would not be considered ‘new construction,’ which is the only way those caps can be increased without going to referendum. The utility revenue lies outside the property revenue caps, so their inclusion in the local property levy would only decrease the mil rate, not let the village or county tax for the lost revenue.
Another issues that will not be addressed with the bill is the fact that when the DTE Stoneman facility closes, its average of $330,000 in local utility fees (the plant is hooked to municipal water and sewer) will be lost as well.