In response to debate over the allocation of tax revenue from Louisiana's two nuclear power plants, the Louisiana Tax Commission on Thursday announced changes that will give more money to the parishes where the plants are located — a decision some local officials consider long overdue.
For roughly 20 years, tax dollars from the two plants were shared among 60 parishes that have Entergy customers, though most of the revenue went to the two parishes that contain the facilities: West Feliciana and St. Charles. But starting this year, that division of tax revenue will no longer be the case.
West Feliciana will now receive an additional $6.6 million per year in tax revenue, which could increase the parish annual operating budget by more than 30 percent, according to parish officials. St. Charles will also receive an additional $6.1 million per year. The remaining 58 parishes will no longer benefit financially from the plants.
Entergy owns both of Louisiana's nuclear power plants, River Bend in West Feliciana and Waterford 3 in St. Charles. Both began operations in the 1980s.
West Feliciana Parish President Kevin Couhig has argued vehemently in recent months that parish residents were getting the short end of the stick, asserting that the Louisiana Tax Commission — the entity that oversees tax collection and determines assessed values for public utilities — was using an unfair and unconstitutional system to determine which parishes benefit from the nuclear power plants.
Couhig said state law requires that the plants are assessed only in the parishes where they're located. According to West Feliciana officials, their parish was shorted more than $100 million over the past 20 years.
Couhig claims that when the tax commission established the current system of tax assessment back in 1997, commissioners blatantly disregarded state law and essentially instituted "a grab by big cities to take tax money from small parishes because they had the power to do that. None of this makes sense other than a few folks got together and came up with an allocation that benefited their parishes at the detriment to us."
Current members of the tax commission — none of whom were serving when that initial decision was made — have asserted the issue is more complicated than local officials have suggested, but commission Chairman Lawrence Chehardy acknowledged Thursday that "there seems to have been no basis for how this was done 20 years ago."
An audit released in June 2017 found that "the procedure (the commission) uses to allocate the value of nuclear power plants is not consistent with its procedure for other public service companies and effectively decreases the (allocated) assessed value … by $50.5 million in St. Charles Parish and $67.5 million in West Feliciana Parish."
ST. FRANCISVILLE — A report released last week by the Louisiana Legislative Auditor's Office…
The usual procedure — and the one being adopted this year — gives each parish a certain percentage of the total assessed value for the company based on Entergy's assets in that parish. However, the percentages for West Feliciana and St. Charles previously did not factor in the entire cost of the power plants, which meant other parishes received some extra tax dollars at their expense.
"These plants should be treated the same as every other public service property for property tax purposes," Chehardy said of the decision to change the allocation formula.
Entergy will also see its tax bill decrease by nearly $1 million annually under the new system because millage rates in West Feliciana and St. Charles are lower than some other parishes. Officials said that savings would likely be passed down to Entergy customers too.
Michael Burns, Entergy Louisiana spokesman, said in a written statement that "it is our current appreciation that the method of allocating value is within the purview of the Louisiana Tax Commission."
Nuclear power provides 28 percent of Entergy Louisiana’s electricity, Burns said.
The 58 other parishes that have been receiving some of the revenues will each see a roughly 21 percent decrease in their allocated assessed value for Entergy. According to a supplement to the audit report released in November, those parishes are set to lose anywhere from $273 per year in Beauregard Parish to $2.3 million per year in East Baton Rouge Parish, depending on Entergy assets and millage rates within each parish. Calcasieu, Jefferson and Ouachita parishes will all lose more than $1 million annually.
In advocating for the change, West Feliciana officials asserted that the losses to the other parishes are relatively insignificant because the revenue represents only a small percentage annual operating budgets for the affected parishes.
Following the announcement Thursday, West Feliciana and St. Charles officials were celebrating. The gains they will receive are not insignificant.
Couhig commended the tax commission for "correcting its past mistakes." He said the additional funds will alleviate some financial constraints within the parish, possibly funding infrastructure projects to improve roads and bridges. The money will also provide more resources for the Sheriff's Office, fire department and school system, which Couhig said is a top priority for parish officials.
He mentioned the risks associated with having a nuclear power plant nearby, but said that ultimately West Feliciana is grateful for the facility and the jobs and revenue it provides.
St. Charles Parish President Larry Cochran similarly said he is happy about the decision, which was a long time coming and marks the end of a "tremendously unfair" practice.
State Rep. Kenneth Havard also said he is happy the commission "did the right thing, which is what the (state) Constitution requires." Havard represents District 62, which encompasses most of East and West Feliciana parishes and the northwest corner of East Baton Rouge Parish. He has been campaigning for the past three years to change the allocation system.
"It's about being fair and doing the right thing," he said. "There's lots of responsibility that comes with having a nuclear power plant in your area, and quite frankly when you've been shorted $100 million over 20 years, it puts a strain on your resources."