CALP: Economic Impacts
WE CAN DO BETTER THAN LONGVIEW!

Tax Revenue

GenPower has negotiated a PILOT (Payment In Lieu Of Taxes) agreement with Monongalia County's Development Authority, County Commission, and Board of Education (click here to download). In the PILOT agreement, in lieu of paying up to $9 million annually in property taxes, Mon County would theoretically own the Longview facility, making it exempt from taxes. However, the plant will be used as collateral for loans, and so the bank will really own the plant. What happens when the loan defaults? The company that ultimately owns Longview Power will pay the county a pre-negotiated amount of money, supposedly over 30 to 33 years. Yet the agreement the County unwittingly signed actually allows Longview to pay regular property taxes before the 30 or 33-year period is up, if that would be cheaper for them due to depreciation and other factors. This results in Longview paying the County far less than its full share of taxes.

If Longview were built and taxed like any other industrial property, it would be liable for up to $9 million in annual property taxes, by GenPower's own estimate. GenPower insists the project is not economically viable if these taxes had to paid, but no financial documents to this effect are in Monongalia County files. GenPower insisted that the County agree to pre-established payments in lieu of taxes (PILOT), or else it threatened to cancel the project.

GenPower and representatives of Monongalia County agreed to the following payment schedule for the PILOT scheme:

• $5 million once construction has begun on the plant; then
   
• $2.1 million per year increasing 3% each year to approximately $5 million in the last (30th) year.

An official PILOT agreement was finalized in June 2003.

The Monongalia County Commission will receive a portion of the PILOT payments from Longview (approximately 22%). The remainder theoretically goes to the School Board, but at least a portion of that sum, if not all of it, must pass through the State Aid Formula. Therefore, Monongalia County schools will not receive the entire amount of the remainder, or the State's contribution to the County's schools will be offset accordingly.

Jobs

Jobs Longview Power sources have stated that the power plant itself would provide between 50 - 60 permanent jobs, and the mining of coal to serve it would provide around 150 to 200 non-Union mining jobs. In addition, around 1200 Union construction workers would be hired, over a period of 3 years, to build the facility. It is not clear whether each of these jobs would last for 3 years, or whether some or all would exist for less than 3 years.

There is no assurance that the jobs that would be created would go to local residents. The unemployment rate in Monongalia County is one of the lowest in the nation (2.7% in May 2004), and the employment level of Monongalia County construction workers is currently relatively high. Such projects as Phase One of the Ruby Memorial Hospital expansion in Morgantown, the Institute of Scientific Research in Fairmont, and the new United Hospital Center hospital in Clarksburg are hiring construction workers now or will be hiring them soon. In light of these facts, it is unlikely that many of the jobs would go to individuals who live in and pay property taxes in Monongalia County. Yet it is the residents of Monongaila County who are giving Longview a huge tax break and who will be saddled with the pollution from the power plant for the next 30 to 50 years.

Overall Econonic Impact

A study of the economic impact of the Longview plant claims that the power plant will be economically beneficial due to the creation of new jobs and indirect economic benefits from its construction. However, a number of problems undermine the credibility of this study:

• The study was performed by entering a small amount of data regarding the construction of a "utility" (not specifying a coal-fired power plant or even a power plant) into a computer program without considering any potential costs to the community.
   
• There is no written record of the analysis, so assumptions and input data cannot be examined and verified.
   
• Much of the construction investment would actually be for the purchase of equipment, such as boilers and turbines. Since these are not manufactured in West Virginia, it would be of limited economic benefit to us.
   
• Coal is planned to be delivered to the plant from Pennsylvania by conveyor and truck. Click here for a map of the 4-mile-long conveyor: Coal Conveyor and Truck Routes Map.
   
• GenPower/Longview Power has refused to guarantee that jobs (nonunion jobs) from coal mining would be in West Virginia. Three of the five mines which plan to provide coal to the power plant are located in Pennsylvania.
   
• There are a number of residential properties in and around the proposed building site. Property values would be decreased in Baker's Ridge, Fort Martin, Stewartstown, and other nearby areas.
   
• Morgantown has exceeded federal air quality health guidelines on several days over the past year. If violations of air standards continue, major economic consequences would occur. It would decrease the federal monies for which we are eligible. Certain types of new industries would be unable to locate here.
   
• The plant will create a negative image of Morgantown, adversely affecting the ability of West Virginia University and other employers to recruit and retain high-quality employees.
   
• There will be economic costs from the negative health impacts due to the proposed plant.

WE CAN DO BETTER THAN LONGVIEW!