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Board of Public Works hears utility assessment concerns

Photo by Steven Allen Adams Pictured from left, Chief of Staff Brian Abraham, Gov. Jim Justice and State Treasurer Riley Moore review a request to reconsider the tentative property tax assessment for Eastern Gas Transmission and Storage.

CHARLESTON — West Virginia’s constitutional officers listened to concerns recently raised by several utilities regarding their property tax assessments for the next fiscal year.

The Board of Public Works met last week in the Governor’s Cabinet and Conference Room at the State Capitol Building in Charleston to provide public utility companies an opportunity to address board members regarding the tentative assessed property tax values determined by the State Tax Department.

The Board of Public Works consists of Gov. Jim Justice, Secretary of State Mac Warner, Attorney General Patrick Morrisey, Agriculture Commissioner Kent Leonhardt, State Auditor J.B. McCuskey, State Treasurer Riley Moore and State Superintendent of Schools Clayton Burch.

One of the few responsibilities the Board of Public Works has is determining the value of property for tax assessments for public utilities.

The types of utilities include airlines, private bridge owners, bus companies, electric providers, natural gas providers, non-cellular communication (paging services), railroads and carlines, pipelines, cell phone companies, private sewer services, landline telephone services, underground gas storage, water and water/sewer services.

State Tax Commissioner Matthew Irby delivered the tentative assessments to the Board of Public Works in September, with the board ordering the assessments Sept. 29 prior to an Oct. 1 deadline.

Board members heard from three public utility companies Wednesday. Representatives of Eastern Gas Transmission and Storage, formed after Berkshire Hathaway Energy purchased Dominion Energy Transmission last November, told board members that the cost value should have been adjusted to reflect regulatory forces on the natural gas pipeline company.

According to the tentative assessment, Dominion Energy Transmission’s tax year assessment for fiscal year 2022 increased by 2.8 percent from the previous year, from $596 million for fiscal year 2021 to $613 million for fiscal year 2022.

According to a PowerPoint document presented to the board, Eastern Gas Transmission and Storage is seeking an adjustment to the cost value due to “economic obsolescence,” defined as “a loss in value or a property arising from factors such as change of use, legislation that restricts or impairs property rights, or changes in supply and demand relationships.” They’re also asking that the correlated value be based on a 40 percent weighting of the cost value and 60 percent weighting of the income value.

Scott Ash, who oversees property tax issues for Eastern Gas Transmission and Storage, said he is working with the State Tax Department on their concerns.

“We agreed to keep working together over the next few days and next week to continue to discuss what we have,” Ash said. “I think we’re comfortable working with the department going forward.”

Board members also heard from representatives of Northfolk Southern, CSX, and Shenandoah Junction Public Sewer. No decisions were required by the board Wednesday, but Irby said his office was in communications with all four utilities, including Eastern Gas Transmission and Storage and was reviewing their concerns.

“We’ve had a number of ongoing discussions with the taxpayers,” said Irby. “In particularly with Eastern Gas, we’ve received a lot of information. We’re working through that information. Incidentally, our new property tax director started two days ago and he would like to take a look at a lot of this information first. He hasn’t had a chance to get his legs under him. But we are planning on working with taxpayers who provide us information and provide you all with detailed answers.”

Although most real and personal property is assessed at the local level by county assessors, public utilities are unique because their property extends through many counties. Rather than have each of the 55 assessors determine the value, the property is appraised and assessed by the state.

The total tentative assessments for tax year 2022 total more than $12.9 billion, a 3.7 percent increase from $12.4 billion in total assessments in tax year 2021.

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