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School districts in line for millions of dollars

By Tom Jackson • Feb 9, 2019 at 6:00 PM

Area school districts in the path of the new NEXUS natural gas pipeline appear confident they will get new tax revenues beginning in 2020.

Beyond that, there’s still uncertainty about what the net effect will be, as school districts such as Edison assume the state will cut school funding in response to the gas pipeline windfall.

Late last year, gas began to flow through the 36-inch, 256-mile NEXUS natural gas pipeline, which runs from Kensington in southeast Ohio through to Michigan, passing through Erie and Sandusky counties.

Several years ago, NEXUS published an estimate on the amount of ad valorem property tax revenues the pipeline would generate for local school districts and governments.

Some of the biggest projected revenues for the first year of funding, which apparently will be 2020, are $3.6 million for Edison Schools, $735,200 for EHOVE, $1.4 million for Perkins Schools, $6.2 million for Margaretta Schools and $870,500 for Erie County.

Rick Jeffrey, Erie County’s auditor, said he contacted NEXUS officials in an attempt to get an update but was told they are still relying on an old document. The gas flow is close to what is projected, so it’s believed those numbers are still going to be fairly accurate, Jeffrey was told.

Jeffrey said actual tax revenue numbers likely won’t be available until this November or December, or even next January.

The NEXUS projections are that tax revenue numbers will decline as the value of the pipeline depreciates, and Jeffrey said other auditors have told him to expect big declines after about three years.

“Sometimes, it’s quite drastic,” Jeffrey said.

School districts should not count on paying off a 20-year note with the pipeline revenues, he said.

In addition, people need to remember the NEXUS revenues will change the state funding formula for districts such as Margaretta, Perkins and Edison, Jeffrey said, so the net increase will be less than what is generated by the pipeline.

That last point also is on the minds of local school treasurers such as Anne Arnold, Edison’s treasurer, and Diane Keegan, who will step down soon as Margaretta’s treasurer.

While Edison expects a net gain, it won’t be what the NEXUS numbers show, Arnold said. The money isn’t being built into the school district’s budget until actual numbers are available, said Arnold, named the outstanding state treasurer in 2017 by the Ohio Association of School Business Officials.

It’s also possible NEXUS will challenge some of the tax valuations, lowering the tax revenues the district receives, Keegan said.

“There’s always the ability to appeal,” she said.

Margaretta approved a resolution last fall to put 25 percent of its NEXUS money in a reserve fund and 25 percent in the general fund, using 50 percent to deal with building needs, Keegan said.

Edison anticipates similar priorities, Arnold said.

No decision has been made yet on how to spend NEXUS money, but “building needs are at the top of that list,” she said.

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