ST. PAUL, Minn. — County officials in northern Minnesota say they’re anxious about a property tax case involving Enbridge Energy that could force them to repay $18 million in tax revenue collected between 2012 and 2014.
Enbridge contends the state Department of Revenue began using new methodology in 2012 to determine the value of pipelines in the area, Minnesota Public Radio reported . Company officials say the methodology overvalued the pipes and raised the company’s property taxes by 24 percent.
Many counties could be devastated if they have to repay the tax revenue, said Matt Hilgart, policy analyst at the Association of Minnesota Counties.
“These are counties like Clearwater, Hubbard, Beltrami, Kittson, that have very limited tax bases and are dealing with arguably some of the highest social service costs in the state,” Hilgart said.
Red Lake County could owe as much as $4 million, but the county’s annual levy is only about $2.9 million, according to Bob Schmitz, county auditor.
“It makes it kind of tough,” Schmitz said. “Where do you get the money from? We only have so much to draw off.”
The company has met with county officials over the past few years to discuss the tax dispute and refund payments.
“Given the unwelcome financial burden the counties may face, Enbridge will work with them, to identify ways to alleviate the financial impact, possibly be spreading refund payments over a number of years, or treating the refunds as credit against future taxes,” said Shannon Gustafson, a spokeswoman for Enbridge.
The company also seeks $32 million in overpaid taxes for 2015 and 2016, but no court date has been set. The company will also appeal its 2017 taxes, Gustafson said.
The company has proposed a line replacement and expansion, which could generate nearly $20 million more in tax revenue, Gustafson said. However, some environmental groups and Native American tribes oppose the plan.
Information from: Minnesota Public Radio News, http://www.mprnews.org