By John Estridge
Southeastern Indiana REMC wants to bring broadband high-speed internet through new fiber to 1,000 Franklin County homes.
But those 1,000 homes may miss out after two FC residents complained about the potential loss of tax money at the Tuesday, January 5, Franklin County Commissioners meeting.
Southeastern Indiana REMC is seeking a property tax exemption for infrastructure it erects in the county over a six-year period for broadband purposes only. It is doing this across southern Indiana. Franklin County’s part of the seven-county plan is about $4 million in investments and includes 170 miles of fiber. The overall plan includes seven counties. Five of the seven counties have already passed the tax exemption while the sixth is considering it. Franklin County is the seventh county.
This area where the tax exemption is allowed for broadband purposes is called an Infrastructure Development Zone.
Once it is passed, other utilities will also be able to make broadband-related investments in infrastructure within the county while enjoying the same tax exemption. It is thought, by those for the zone, it will greatly enhance broadband access within the county for current residents and potential new residents and business concerns.
Franklin County Attorney Grant Reeves explained the zone and the tax exemption. Reeves said the infrastructure includes wiring, switching stations and all the electronics needed to put broadband within the county.
Reeves also said he spoke with an acquaintance who lives in Jackson County where this was done by Jackson REMC. The acquaintance lives in a rural area at the end of a dead-end road and has the broadband high-speed fiber internet service. And the acquaintance and family are very happy with the service.
“I spoke to somebody who is down there off a dead-end road and down a long lane, and they said they had service, and they were happy with it,” Reeves said. “It seems like it was working there.”
SEIREMC Director of Marketing, Key Accounts and Business Development Barry Lauber also spoke about the proposed investment by the utility he represents.
Lauber said SEIREMC currently pays the county more than $15,000 in personal property tax annually. And that amount will continue and not be affected by the proposed tax exemption. Again, it was emphasized the proposed tax exemption is just for new infrastructure improvements placed in the next six years for broadband purposes only.
Reeves said the investments for the broadband improvements are depreciable and their value will go down over time, further limiting its impact on taxes.
Mildred Simmermeyer, a resident, is against the proposed tax exemption. She said other taxpayers in the county will have to pay more in taxes to pay for county employees’ salaries.
“The tax abatement that you’re giving up will be forced on the resident taxpayer, because the county rate that we are being billed right now will have to be increased to pay county employees,” she said.
Commission President Tom Linkel said he did not agree with Simmermeyer’s statement. The proposed tax exemption would not cost the county any money while bringing high speed internet to 1,000 homes and hopefully, with more utilities taking advantage of the zone, opening up broadband to more homes and businesses within the county.
According to Linkel, especially during the pandemic, bringing broadband high speed internet access to rural areas in the county would be a big plus.
“We have so many people working from home right now and cannot,” Linkel said.
Simmermeyer said blue collar workers do not work from home on computers.
Lauber stated the county is not currently receiving the money from the proposed investments so the county is not, in fact, losing any revenue with the exemption. Also, Lauber said the need for e-learning is a dire need the SEIREMC is hearing from its customers.
Later in the meeting, Simmermeyer said satellites will bring broadband access to rural communities so the current proposed broadband plan is not needed.
Sara Duffy, who owns the Franklin County Observer, was a former Franklin County Community School Corporation Board of Trustees member and is the school’s representative on the Franklin County Redevelopment Commission, said she is against the proposed tax exemption because of the economic impact on the schools.
She said, with the tax exemption, the commissioners are locking SEIREMC to paying $15,000, which is distributed to schools, townships and the county for the duration.
Officials again stated the tax exemption is just for broadband purposes and does not include any other improvements SEIREMC and other utilities might do in the county in the future.
A check found the FCCSC has around a $30 million annual budget. The current personal property payment of $15,000, if devoted entirely to the FCCSC, which it is not, comprises .0005 of 1 percent of the FCCSC annual budget.
She was also against the tax exemption because SEIREMC will increase fees to its customers. She said this will increase the utility bills to the county and the schools.
Lauber said if its customers choose to have the broadband service, there will be an additional fee for that service. It should not increase rates if customers choose not to take the broadband service.
Later, Duffy asked the utility to make a gift to the school system to compensate for the lost revenue.
Reeves again emphasized access to broadband in rural areas may bring new residents to the area and new businesses, thus increasing the county’s tax base, which will increase tax revenue to government entities.
“I hope it turns out for the best, but I’m reluctant to be 100 percent behind it because of what it potentially freeze revenue going to the schools,” Duffy said.
Commissioner Tom Wilson suggested the county put a decision on hold until it is discovered what the economic impact will be. The other two commissioners agreed with Wilson.
That turned out to be a complicated search. After the meeting, the commissioners went to Franklin County Assessor Brenda Eckerle. She stated personal property tax from utilities is something not tracked by the county assessor’s office. Instead, it is paid directly to the state, which then disseminates it to the counties.
“Most, if not all, of the new assessed value generated by this project would be state assessed distributable personal property,” Eckerle said in a subsequent email to Linkel. “County Assessors have little to no involvement with these assessments. Distributable personal property owned by utility companies is self-reported to the State. These assessments are reviewed and approved at the State level. And the taxes generated are distributed to local governments/taxing units by the State.”
Linkel asked Lauber if the county does not approve the tax exemption if Franklin County will still be part of the broadband program.
Lauber said Franklin County, if it takes the position of not allowing the tax exemption, will not be a part of the initial service, which is deemed to start yet this year. At some further time in the future, it might come to Franklin County but will not be a part of the current planned improvements.
“Franklin County will not get it in the near future,” he said.
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Amazes me the level of stupid that goes into the process. The school should want students to have quality internet service. Not shake the provider down for cash before they approve it. Anyone who has had satellite internet service knows how horrible, slow and unreliable it is. Why hold up progress for money that has never been received or spent.
Would be nice if the school children and their families were considered here. Some kids don’t have access to high speed. These children are told that they can’t attend school because of the COVID which is not their fault. Then they are told to do elearning on line. Not a problem unless you don’t have access to the internet. If the family can’t take their children to a library for connection, the child misses assignments and gets a failing grade. If they try the satellite provider, it is slow and not practical. You keep getting a circle of death and eventually the project the child has been working on is lost and it shuts down.