District Well-Prepared to Deal With New Process Gear Settlement

Thursday, August 20, 2009

The ESM Board of Education has approved a settlement with New Process Gear that ultimately reduces the amount of tax revenue coming to the district, but sound long-range planning will limit the impact of this development.

"We've known for some time that there was likely to be a downward assessment in the plant's value, resulting in less revenue for the district," stated Superintendent Dr. Donna Desiato. "Therefore, we planned for this day with great care."

The District worked closely with the Town of Dewitt, and the ESM Board of Education planned for fluctuations in total assessed value like this by establishing a reserve to ease any year-over-year burden that might be associated with the reduction in revenue.

"This is just one element of our long-range financial planning to keep our school taxes relatively stable," said Dr. DeSiato.

Overall the settlement is a good one for district taxpayers for a number of reasons. Most important of these is that it does not call for retroactive reassessment, which would otherwise have resulted in payments having to be made by the District to Magna for tax overpayments by the property owner in the challenged years.

Furthermore it ramps down the total value of the property over a four-year period, lessening the impact in any one year.

As a public agency, ESM officials are always concerned with the loss of revenue; however in this case, we do we believe that through prudent planning, use of the dedicated reserve, the gradual ramp down, and the vibrancy of our commercial tax base, we will be able to balance the loss with new growth in our business segment, which will reduce any substantial risk or impact to our ESM taxpayers or the business of our school district.

In a final statement regarding the plant's future closing, Dr. DeSiato said, "While there will be some revenue impacts to the district due to the plant's closing, our first order of business has been to assist the families of those affected by this local crisis, and we remain committed to that goal."

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