Local tax revenues generated by Wisconsin coastal energy facilities

[From the U.S. Government Printing Office, www.gpo.gov]

LOCAL TAX RIEvenuef GenERRTIEP By
wifconfin CORf TRL enERGY FRCILITircf

December 1982 COASTAL ZONE
INFORMATION

2441
.A2 Prepared by Robert Halstead
H3 for the
1982
WISCONSIN COASTAL MANAGEMENT PROGRAM

LOCAL TAX REVENUES GENERATED BY

WISCONSIN COASTAL ENERGY FACILITIES

Prepared by:
Robert Halstead

Bureau of Coastal Management
Wisconsin Department of Administration

LibrarY

December, 1982

U S DEPARTMENT OF COMMERCE NOAA
COA'Qz1 AL SERVICES CENTER
2
2-
Z34 SCUTH @iOHON AVENUE
r QTON , SC 29405-2413

AL.

Anthony S. Earl
S"tate of Wisconsin G,,,,,or
Dods J. Hanson
Secretary
11,)Deparlment of Administration

101 South Webster Street Madison, Wisconsin 53702 Mailing Addr
Post Office Box 7868
February 24, 1983 Madison, Wl 53707

Dear Friend:

Enclosed is a copy of Local Tax Revenues Generated By Wisconsin Coastal Energy
Facilities, a study,recently completed by the Wisconsin Coastal Management
Program.

We believe t.he study is timely in light of anticipated reductions in federal
funding for coastal energy Impacts. We hope the study will assist coastal
planners in evaluating the extent to which direct taxes on energy facilities
may be used for financing impact mitigation measures.

The report documents the amount of revenues generated for municipal and county
governments by specific types of energy facilities. The major source of such
revenues are utility shared tax payments to counties and municipalities
hosting major electric generating stations, totalling $4.9 million in 1981.
Property and occupational taxes on coal transshipment facilities were the
second largest source of payments, providing approximately $1.3 million to
counties and municipalities in 1981.

We welcome your comments on the report. Please direct correspondence to the
author, Robert Halstead, Coastal Energy Impact Coordinator, P.O. Box 7868,
Madison, WI 53707.

Respectfully,

Allen H. Miller
Program Manager
Bureau of Coastal Management

AHM:BH:ry/2840Q-2/d

Enclosure

LOCAL TAX REVENUES GENERATED BY

WISCONSIN COASTAL ENERGY FACILITIES

TABLE OF CONTENTS

Page

Executive Summary . . . . .. . . . . . . . . . . . . . . . . . . . . .

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Tax Status of Coastal Energy Facilities . . . . . . . . . . . . . . . 4

Utility Shared Taxes . . . . . . . . . . . . . . . . . . . . . . . .

Local Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . 17

Occupational Taxes on Coal and Petroleum . . . . . . . . . . . . 20

Distribution of Local Tax Revenues by Community . . . . . . . . . 25

Executive Summary

Wisconsin coastal energy facilities provide revenue to municipal and county

governments through utility shared taxes, property taxes, and occupational

taxes. Electric generating stations are subject-to utility property taxes

collected by the state, and are exempt from the local property tax levies to

which other energy facilities are subject. Coal docks and petroleum

refineries are subject to special occupational taxes.

The major source of tax revenues generated by coastal energy facilities are

utility shared tax payments made to coastal counties and municipalities,

totalling $5.3 million in 1980 and $4.9 million in 1981.

Local property taxes on coastal energy facilities levied in 1981 (payable in

1982) total about $1.7 million.

Occupational taxes on coastal coal docks and petroleum refineries totalled

$308,569 in 1981. Of this total, $235,429 was retained by municipalities;

$48,753 was distributed to counties; and $24,377 was paid into the state

general fund.

Payments to communities from all three tax sources totalled $4.25 million in

1981. The City of Superior was the largest recipient, with $1.36 million.

Payments to counties from all three tax sources totalled $2.65 million in

1981. Kenosha County was the largest recipient, with $625,607.

1.0 Introduction

The purpose of this report is to identify the state and local taxes applicable.

to Wisconsin coastal energy facilities and to determine the amount of revenue

generated by these taxes. The report focuses upon revenues payable to

municipalities and counties through the utility portion of the shared tax

formula, occupational taxes, and local property taxes.

The report does not address state income and sales tax effects of the

construction and operation of coastal energy facilities.

Summing the payments under each-of the three tax categories studied here

provides only an approximation of total annual revenue contribution because of

different base periods. Because of frequent changes in the utility portion of

the shared tax formula, future tax payments to local governments may be less

than under the present formula. Utility shared taxes are reported based on

actual 1980 and 1981 payments. Local property taxes reported are 1981 levies

payable in 1982. Occupational taxes are actual 1981 payments based on 1980

receipts of coal and crude petroleum.

The broader topic of local economic impacts of coastal energy facilities has.

been previously investigated and reported in the Great Lakes Basin Commission,

Inergy Facility Siting in the Great Lakes Coastal Zone: Analysis and Policy

Options, prepared for the Office of Coastal Zone Management, NOAA, U. S.

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Department of Commerce (1977); and D. Muench and R. Halstead,'Energy Facility

Impacts: A.Handbook for Citizens and Local Government Officials, prepared for

the Wisconsin Coastal Management Program by Bay-Lake Regional Planning

Commiss.ion,,(1981)-.

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2.0 Tax Status of Coastal Energy Facilities

The tax status of Wisconsin coastal energy facilities varies according to the

type., ownership, and size or capacity of the facility. The major applicable.

taxes are ad valorem utility taxes collected and distributed by the state;

occupational taxes collected by a municipality an d divided between the

municipality, the county and the state; and local real estate and personal

.property taxes levied at the municipal level. The tax status of the most

common energy facility types is presented in Table 2.1.

TABLE 2.1

TAX STATUS OF WISCONSIN COASTAL ENERGY FACILITIES

FACILITY TYPE APPLICABLE TAXES
OCCUPATIONAL TAY. PROPERTY TAX AD VALOREM UTILITY TAX
(STATE) (LOCAL) (STATE)

Coal Dock Yes Yes No

Electric Generating.
Station No No Yes

Pipeline Terminal
Facilities No Yes Yes

Petroleum Refinery Yes Yes No

Petroleum Storage No Yes No

Source: Bureau of Coastal Management, Wisconsin Department of Administration

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1 s presented in
The current inventory of taxable coastal energy facilittes i'

Appendix A. Sixteen electric generating stations, ranging in size from 2 MW

to 1690 MW.,- are located along the coast (see Figure 2-1). Nine of these are

coal-fire&, one is coal- and wood-fired, two are'nuclear, and four are fueled

by oil and natural gas. Ten coal docks receive Eastern and Midwestern coal by

vessel, and one transshipment terminal-receives Western coal by rail for

transfer f6'lake vessels (see Figure 2-2). Three electric utility coal docks

(Pullian, Port Washington, and'Valley) are considered part of the power plants

they serve. Twenty-three petroleum terminals and storage facilities, eight of

which receive or ship products by ves,sel, are located at lake ports, as is

Wisconsin's only petroleum refinery.

The greatestconcentrations of coastal energy facilities are around the port

cities of Green Bay, Milwaukee,, and Superior. Coal docks and petroleum

facilities are generally clustered in major port areas, as are older electric

generating..facilities. More,recently,constructed ppwe.rplants such as the

Kewaunee and Point Beach Nuclear units are located in rural areas.

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Figure 2. 1

Coastal Pmmr Plants in Wisconsin

Coal-Fired

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Potential

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Kajor Coastal Population Centers

25,000.- 100.000
13' Greater than 100,000

Figure 2.2

Coastal Coal Transportation. Transfer,
a" Storage Facilities in Wisconsin

Coal Terminals

WoUng

a Planned

A Potential

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Upacted Rail Lines

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Major Coastal Population Centers

25,000 100.000
0 Greater than 100,000

-7-

3.0 Utility Shared Taxes

The largest single source of tax revenues generated by coastal energy

facilities results from special utility payments under state revenue sharing

laws (Chapter 79, Wisconsin Statutes). Under Wisconsin statutes, electric

generating plants and associated transmission facilities, pipelines, and some

port transportation facilities are exempt from local taxes. These facilities

are taxed by the state, and collections accrue to the state's general fund.

The state makes payments based on the value of qualifying property to both

host and non-host communities, according to a formula established by statute.

This discussion will'focus upon electric generating stations, since these are

by far the greatest source of tax revenues from energy facilities.

The utility shared tax was established by law in 1905, and provided that 85

percent of the tax on utility property be paid to the municipality and the

remaining 15 percent to the state. The law was revised in 1917 to include

payments to counties, and a 1963 amendment set the distribution formula at 17

percent to the state, 19-1/2 percent to the county and 63-1/2 percent to the

municipality.

During the 1950s and 1960s, Wisconsin utilities, like their counterparts

across the country, began to construct more and larger electric generating

units, located for the most part at sites along Lake Michigan. Coastal

locations offered water for once-through cooling system s. waterborne coal

transportation, and access to existing transmission networks. This had the

effect of concentrating the bulk of the state's electric generating capacity

in a few coastal localities. The current inventory of coastal electric

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TABLE 3.1

WISCONSIN COASTAL ELECTRIC GENERATING STATIONS

ORIGINAL COST
CAPACITY YEAR (MILLIONS OF
COUNTY- HUNTCIPALITY UNIT (MW) FUEL INSTALLED DOLLARS)

Ashland Ashland Bay Front 82 Coal, Wood 1941-58 18.0

Brown Green Bay Pulliam 383 Coal 1926-64 56.9

Douglas Superior Winslow 25 Oil 1942-52 5.1

Kenosha Pleasant Prairie Pleasant Prairie 1 570 Coal 1980 368.9
Kenosha Pleasant Prairie Plea"nt'Prairie 2 570 -Coal (1984/5)

Kewaunee Carlton Kewaunee 535 Nuclear 1974 214.6

Manitowoc Manitowoc Manitowoc 69 Coal 1935-64 9.8

Manitowoc Two Creeks Point Beach 909 Nuclear, Oil 1970-72 172.5

Marinette Marinette W. Marinette 84 Oil, Gas 1971-73 7.0

Milwaukee Milwaukee Commerce 35 Coal 1941 5.2

Milwaukee Milwaukee @.Valley 270 Coal 1968-69 50.3

Milwaukee Oak Creek. N. Oak Creek 500 Coal, Oil 1953-57 93.3

Milwaukee Oak Creek S. Oak Creek 1,190 Coal, Oil 1960-66, 1968 166.3

Milwaukee -,St-..Francis Lakeside 345 .011, Gas 1920-30, 1968 32.9

Ozaukee Port Washington Port Washington 420 coal. Oil 1935-50, 1969 56.7

Sheboygan Sheboygan Edgewater 3-4- 447 Coal 1942-51, 1969 -64.0
Sheboygan Sheboygan Edgewater 5 400 Coal (1984/5) -

Source4 Public Service Commission of Wisconsin, Bulletin No. 46 (August, 1981)o and Wisconsin Division
of State Energy, Department of Administration.

generating stations is presented in Table 3.1. The assessed value of new

facilities increased as state utilities began to construct larger coal., and

later nuclear, power plants. The trends towards larger and more expensive

power plants concentrated at a few sites, coupled with the generous provisions,

of theutility shared tax law, resulted in the creation of so-called "tax

islands", communities in which the utility payments were sorgreat that local

property taxes were.substantially reduced or eliminated (for example, Two

Creeks).

The emergence of these "tax islands" raised concerns about the equity of the

utility shared tax distribution formula. A related but seldomly expressed

concern involved the fear that electric utilities would capitalize upon,

localities' desires for tax benefits to reduce opposition to new facilities

regardless of the potential environm ental.impacts, particularly the impacts of

proposed nuclear facilities, of which six were planned for construction in the

early 1970s. These concerns resulted in substantial revision of the shared

utility tax laws.

In 1967, the law was amended to equalize the distribution of revenues between

host municipalities, host.counties, and the state as a whole. The 1967

amendments also specified minimum and maximum payments to municipalities.

Further amendments in 1972,, 1975, 1977 and 1978 reduced the level of payments

to host municipalities, increased payments to host counties, imposed minimum

and maximum per capita payments to receiving jurisdictions, and provided

payments to host communities during the construction period of new power

plants in recognition of the need for additional public services during

construction.

_10-

The cumulative affect .of these revisions is illustrated by tax payments to

major power plant host communities in the Bay-Lake region for the years

1968-1978 (Table 3.2). In 1971', four municipalities in the Bay-Lake region

each received an average of more than $1 million per year. After the 1972

amendments,, these payments were substantially reduced in each of the following

years. Payments to counties hosting new power plants (Kewaunee, Manitowoc,

and Sheboygan) increased significantly in the mid-1970s before gradually

tapering off.

Current shared utility taxes on electric geher Iating'stations are based on the

1975, 1977 -anId 1978 amendments. Payments to municipalities and counties for

operating power plants are determined by the book value of the plant (which

decreases with age); status of the host municipality (village, town, or city);

population o .f the',host municipaiity; and population of the host county. The

base paym6nt,to towns i's 3 mills (9 mill is 1/10 of a cent) on each dollar of

assessed value up'to $100-million.' The base payment to cities and villages is

6 mills on the first $100 million. The maximum payment to a town, village or

city may not exceed $300.00 per capita. The minimum payment to a municipality

for hosting'a facility rated at 200 MW or larger is $75,000.00. Payment to

counties is set at-3 mills on the first $100 million of assessed value for

facilities located in cities or villages of the county, and 6 mills for

facilities'l'ocated in towns within a county. The minimum payment to a county

hosting a 200 MW or larger power plant is $75,000. The maximum payment to a

county is $iOO.00 per capita.

The 1978 amendment provided a sliding scale reduction in payments for power

plants constructed prior to 1975. The 1978 payments were guaranteed to be no

less than 70% of the 1975 payments. This guaranteed payment figure decreases

10% annually. For mu nicipalities in which power plants were operational in

1975, the final guaranteed payment, of 10% will be reached in 1984. There are

no guaranteed payments for plants put in operation after 1975.

In'addition to payments for operating power plants, the law also provides

payments to municipalities and counties during the construction period. The

1975 amendment provided a $100,000.00 per year payment to the host

municipality during each of the first four years after construction commenced,

for facilities rated at 250 MW or greater. The 1977 amendment provided the

same level.of paym6nt,annually to counties during the four-year construction

period. The construction period payments to both municipalities and counties

are exempt from the per capita limitations.

Total special utility tax payments to Wisconsin coastal communities and

counties hosting major power plants in 1980 and 1981 averaged about $5 million

per year (see Table 3.3). The largest recipients at the municipal level were

the Cities of Milwaukee, Oak Creek, Pleasant Prairie, and Sheboygan; and the

Towns of Carlton and Two Creeks. The largest recipients at the county level

were Kenosha, Kewaunee, Manitowoc, Milwaukee, and Sheboygan.

Per capita utility shared tax payments for 1980 by municipality a county are

presented in Tables 3.4. The Town of Two Creeks received the maximum per

capita payment allowed by law, $300.00 per capita, for a total payment of

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TABLE 3.2

UTILITY SHARED TAX REVENUES FOR SELECTED AREAS
IN THE RAY-LAKE REGION
1968-1978

MUNICIPALITY 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

CARLTON 16.620 79,532 192,568 788,385 46,906 468,141 568,311 333,842 320,100 320,400 300,000
(1974) 648,392* 156,709* 9.524*

GREEN RAY 1,195.928 1,274,706 1,290,544 1,461,859 367.906 337,548 303,991 183,481 265,132 146,783 128,437
(1964)

SHEBOYGAN 453,779 751.945 934,782 1,294,886 529,724 500.587 , 484.626 294,349 264,914 235.479 213,720
(1969)

WO CREEKS 213,0818 636,259 997.512 1$901,574 24,002 366,503 375,051 228,481 205,633 182,785 159,937
(1970 & 1972) 360,600* 340.200* 263,053*

COUNTY

REWAUNEE RA 55,974 92,972 280,497 706,678 722,073 1,073,601 972,839 486,420 847,667 603,350

BROWN NA 440,844 461,776 531,864 241,474 224,034 204,308 196,472 98,236 98,236 70,699

SHEBOYGAN NA 313,371 380,908 508,822 324,662 307,912 301,277 299,709 149,836 149,836 122,710

MANITOWOC NA 309,937 429,317 719i579 702,350 731.983 743,482 7106,066 353,033 601,762 565.020

Guarantee Payment
NA - Not Available

Source. David Muench and Robert Halstead, Energy Facill ty Impacts (1981).

TABLE 3.3

SPECIAL UTILITY PAYM`FNTSa TO WISCONSIN COASTAL COMMUNITIES
AND COUNTIES HOSTING MAJOR ELECTRIC GENERATING FACILITIES
1980 AND 1981

COUNTY COMMUNITY 1980 19RI
DIRECT DIRECT TOTAL PAYMENT DIRECT DIRECT TOTAL PAYMENT
PAYMENT PAYMENT TO LOCALITIES PAYMENT PAYMENT TO LOCALITIES
TO LOCALITY TOCOUNTY AND COUNTY TO LOCALITY TO COUNTY AND COURT Y

As hland Ashland 27,888 0,621 47,509 23,939 17.447 41,386

Brown Green Bay 91.140 75.000 166.740 75,000 75.000 150.00

Douglas Superior (City) 96j373b 18,379 114,752 77,099b 18.301 95,40

Kenosha Pleasant Prairie 380.077 717,950 1,098,027 300.064 625,607 925,671

Kewaunee Carlton 300,000 602,847 902,847 300,000 602,738 902,739
Manitowoc Manitowoc 4@401 477,802 634,403 4,473 473.652 634,425
Two Creeks 151,800 156,300

Marinette Marinette 1,901 43,854c 45,755 2,033 41,922c 43,955

Milwaukee Milwaukee 371,793 412.574
Oak Creek 601,730 547,129 1,595,652 601.641 564j688 1,653,903
St. Francis 75,000
75,000

ozaukee Port Washington 82,697 75,000 157,697 75,000 75.000 150,006.

Sheboygan Sheboygan 281,895 209,285 491,180 171.153 102.409 273,562
TOTAL $2,467,695 T2-,T8 6 -.8 6 7 T5_,_25T. 5-6 2 T2_,_2_7T._2T6_ T2_,_5_9_6_,_7_6T $4.871,040

a- Includes payments based on assessed.value of substations, transmission facilities and other related property and equipmelit.
b- Includes payments based on assessed value of port transportation facilities not related to electric generation.
c- Includes payments based on assessed value of hydroelectric facilities located on Lake Michigan tributaries but situated
outside the qormally Oefined coastal management zone.

Source: Bureau of Coastal Management, Wisconsin Department of Administration. Compiled from Bureau of Local Financial
.Assistance, Division of State and Local Finance, Wisconsin Department of Revenue, Taxe
f:r. A
l,;:l aand Shared Taxes in
Wisconsin Municipalities, 1980 (January, 1982). and Notice to City and County Cle yments (NovembeF_16,
1981).

TABLE 3.4

SPECIAL UTILITY PAYMENTS PER CAPITA FOR
SELECTED COASTAL MUNICIPALITIES AND COUNTIES, 1980

1980 SPECIAL 1980 1980
MUNICIPALITIES UTILITY PAYMENTS POPULATION $/CAPITA

Carlton $300,000 1,125 $166-66

Green Bay 91,740 87,120 1.05

Oak Creek 601,730 16,605 36.24

Pleasant Prairie 380,077 12,428 30.58

Port Washington 82,697 8,612 9.60

Sheboygan 281,895 47,566 5.93

Two Creeks 151,800 506 300.00

1980 SPECIAL 1980 1980
COUNTIES UTILITY PAYMENTS POPULATION $/CAPITA

Brown $ 75,000 173,070 $ 0.43

Kenosha 717,950 120,020 5.98

Kewaunee 602,847 19064 31.13

Manitowoc 477,802 81,744- 5.85

Mi lwa.uk4E@e 547,129 9449139 0.58

Ozaukee 75,000 66,981 1.12

Sheboygan 209,285 99,657 2.10

Source: Bureau of Coastal Management, Wisconsin Department of Administration.
Compiled from Taxes, Aids and Shared Taxes in Wisconsin
Municipalities, 1980 (January, 1982).

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$151,800.00. The Town of Carlton received the maximum allowable payment to a

town, $300,000-00 per year (3 mills on the first $100 million assessed value),

which represents a per capita payment of $266-66. Among counties, the highest

per capita distribution was.to Kewaunee, where the total payment of

$602,847-00 represents $31.13 per capita.

While successive revisions to the utility shared tax laws, during the 1970s.

have reduced the number and size of "tax islands", the distribution formula

.still allows substantial benefits to several localities. The most notable

examples are the Towns of Carlton and Two Creeks which host nuclear power

plants constructed prior to 1975., In 1980, shared utility tax revenues in Two

Creeks were sufficient to allow the town to eliminate property taxes. In

1980, special utility payments to the Town of Carlton exceeded local property

tax collections by almost $80,000-00. In prior years, Carlton had been able

to dispense with property taxes altogether. In contrast, the $380,000.00

special utility tax payment to the Town of Pleasant Prairie, site of a major

new two-unit, coal-fired generating station equaled about 10% of the total

property tax collected.

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4.0 Local Propert.y Ta-xes

Local-property taxes on certain types of energy facilities are a major source

of revenue in at least one coastal community. Electric generating stations,

the most highly assessed coastal energy facilities, are exempt from-local

taxes. Coal docks, petroleum storage and refineries, and pipeline terminals

are subject to local real estate and personal property taxes-.

It is difficult to compare the local taxes levied by'different communities on

coastal energy facilities. Real-estate is assessed differently, and taxed at

different-rates, in different communities. The acreage occupied and value of

installed equipment may vary considerably between similar facilities of

comparable tapac'ity.'

The 1981 property tax levies (payable in 1982) on coastal energy facilities

total about $1.7 million (see Table 4-1). The City of Superior alone accounts

for more than-$1.'O million (almost 62 percent of the total), while Milwaukee

and Green Bay receive more than a quarter million dollars each. Coal docks

account for $1,051,161 of the total.

The fiscal significance of property taxes on coastal energy facilities varies

from community to community (see Table 4.2). In Superior, local taxes on

coastal energy facilities comprise more than 10 percent of the total

mercantile and residential property levy. In Green Bay, the percentage is

0.7, and in Milwaukee it is 0.1 percent.

TABLE 4.1

LOCAL REAL ESTATE AND PERSONAL PROPERTY TAXES LEVIED
ON COASTAL ENERGY FACILITIES, 1981 (Payable in 1982)

1981
(PAYABLE 1982)
COUNTY CITY/TOWN FACILITY NAME FACILITY TYPE TAX LEVY
Ashland Ashland C. Reiss Coal Company Coal Dock 18,474
Brown Green Bay Amoco Oil Company Pipeline Terminal Facilities 29,932
Green Bay Apex Oil Company (formerly Pipeline Terminal Facilities 16,237
Clark Oil Company)
Green Bay Blue Line Coal Company Coal Dock 179223
Green Bay C- Reiss Coal-Company Coal Dock 45,724
Green Bay Cities Service Oil Company Pipeline Terminal Facilities 14,805
Green Bay Green Bay Products Terminal Pipeline Terminal Facilities 7,917
Green Bay Green Bay Terminal, Inc. Pipeline Terminal Facilities 24,403
Green Bay Fort Howard Paper,Company Coal Dock (Motor Street) 39.220*
Green Bay Fort Howard Paper Company Coal Dock (Arndt Street) .3,966
Green Bay Fort Howard Paper Company Pipeline Terminal Facilities
Green Bay Koch Fuels, Inc. Pipeline Terminal Facilities .22,907
Green Bay Mobil Oil Corporation Pipeline.Terminal Facilities 19,075
Green Bay U.S. Oil Company, Inc. Pipeline Terminal Facilities 1 107
Green Bay CITY TOTAL S2.5g,'300
Door Washington-Island Amoco Oil Company. Petroleum Storage/Transfer NA
Douglas Superior Amoco Oil Company Pipeline Terminal Facilities 36,253
Superior Dome Petroleum Pipeline Termina 1 Facilities 157.891
Superior Husky Oil Company Pipeline Terminal Facilities 18,868
Superior Lakehead Pipeline Company Pipeline Terminal Facilities 25,056
Superior Murphy Oll Corporation Petroleum Refinery and Terminal 147,731
Superior Superior Midwest Energy Term. Coal Dock 669,197
Superior Union Oil Company of California Pipeline Terminal Fac'ilities 16 761
Superior CITY TOTAL 1,071:757
Manitowoc Manitowoc C. Reiss Coal Company Coal Dock 9,546
Two Rivers U.S. Oil Company, Inc. Petroleum Storage/Transfer KA
Marinette Marinette Marinette Fuel and Dock Co. Coal Dock KA
Milwa ukee Milwaukee Hometown, Inc.. Coal Dock KA
Milwaukee Jacobus Company Pipeline Terminal Facilities 9,716
Milwaukee Marathon Oil Company Pipellae@Terminal Facilities 16,324
Milwaukee Milwaukee Solvay Coke Co. Coal Dock 128,644
Milwaukee Mobil Oil Conpany Pipeline Terminal Facilities 17,414
Milwaukee Schneider Fuel Company 'Coal Dock 20,315
Milwaukee Schwerman Marine Terminal Petroleum Storage/Transfer 49,797
Milwaukee Shell Oil Company Pipeline Terminal Fac ilit ies 25,897
Milwaukee Tanco Terminal Pipeline Terminal Facilities 2 850
CITY TOTAL 271,157
Racine Racine W.H. Pugh Oil Company Petroleum Storage/Transfer 7,429
Sheboygan Sheboygan C. Reiss Coal Company Coal Dock
Sheboygan C. Reiss Coal Company Petroleum Storage/Transfer 98 852
Sheboygan CITY TOTAL

TOTAL
$2,736,515

SOURCE: Bureau of Coastal Management, Wisconsin Department of Administration. Compiled from personal communications
with local assessors.

TABLE 4.2

LOCAL PROPERTY TAX LEVY ON COASTAL ENERGY FACILITIES
AS PERCENTAGE OF TOTAL LEVY ON BUSINESS AND
RESIDENTIAL PROPERTY) 1981 (PAYABLE 1982)

TAX RATE TOTAL LEVY ON PERCENTAGE
PER $1,000 COASTAL ENERGY OF TOTAL
ASSESSED VALUE) FACILITIES LEVY

Ashland. $43.97 $ 18,474 0.8

Green Bay 25.96 259,300 o-7

Milwaukee 40-12 271,157 0.1

7
Sheboygan 30.05 98,852 0.6

Superior (City) 21.08 1,071,757 10.2

Source:* Bureau of Coastal Management, Wisconsin Department of Administration.
Compiled from personal communications with local assessors.

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.5.0 Occupational Taxes on Coal and Petroleum

Wisconsin statutes provide for occupational taxes on a variety of port

activities, including.grain, coal, and taconite storage and transfer, and

petroleum refining. These taxes were first imposed in the World War I era and

were originally envisioned as a substitute for the personal property tax on

business inventories. During the past two decades, as changes in trade

patterns have concentrated the activities subject to occupational taxes in the

port of Superior, the occupational taxes have come to be seen as financial

assistance to an economically distressed region of the state. An analysis

prepared by.-the Department of Administration in 1977, when new occupational

taxes were imposed on taconite and other occupational tax rates were raised,

pointed out that "occupational tax increases would not redistribute state tax

dollars -- they would merely increase-the share borne by interstate extractive

industries of the cost imposed on-Superior by servicing out-of-state markets.,

with transshipment facilities."

In'1917, when the occupational tax on coal was instituted, Wisconsin ports

(including.the twin ports of Superior and Duluth) received 18.5 million tons.

of coal, much of it for transshipment to the Twin Cities and other inland

markets. Eight Wisconsin ports handled 100,000 tons or more in 1917. The

original tax rates were 1-1/20 per ton on bituminous coal (about 2/10 of one

percent of the average 1917 delivered value), and 2@ per ton on anthracite

coal (about 3/10 of one percent of the average 1917 delivered value). In

1977, the tax was increased to its current level of 50 per ton on bituminous

coal and 7J per ton on anthracite coal. Originally, the tax was collected

each year based on receipts reported for the 12 months ending April 30 of the

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reporting year. In 1977 the base period was changed to the preceding calendar

year. The occupational taxes paid in 1976, for example, represented taxes on

coal shipments received between May 1, 1974, and April 30, 1975. Occupational

taxes paid 'in 1977 and succeeding years represent.taxes on shipments for the

preceding calendar year. -Receipts,from the occupational tax are shared

according to the following formula: 70 percent to the municipality in which

the dock is located, 20 percent to the county in which the dock is located,

and 10 percent-to the state general fund.

The occupationaltax applies only to coal brokerages and transshipment

terminals. Companies operating docks which receive coal for their own use

only are exempt from the tax. The tax is, therefore, not collected on coal

deliveries to lakeside power plants, such as Pulliam, Port Washington, and

Valley,.nor on coal deliveries to industrial docks such as the Fort Howard

Paper Company'in Green Bay or-the Milwaukee Solvay Coke Company.

Two distinct movements of coal are currently subject to the occupational tax,

the eastern and midwesiern coal delivered to Wisconsin docks by lake vessel,

and western coal delivered to the Superior Midwest Energy Terminal by rail for

transshipment to Michigan power plants. At the current rate of 50 per ton on

bituminous coal, the occupational tax represents about 1/10 of one percent of

the value of eastern or midwestern coal delivered to docks in Wisconsin, and

represents approximately 2/10 of one-percent of the value of Montana coal

delivered to the terminal in Superior. The tax on anthracite coal is of

little significance, since.total deliveries of anthracite to the state are

presently less than 5,000 tons per year.

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Wisconsin docks currently receive between 3-1/2 and 4 million tons of eastern

and midwestern coal by vessel per year, of which approximately I million tons

per year is subject to the occupational taxes. The Superior Midwest Energy

Terminal currently receives more than 4 million tons of western coal per year,

all of which is subject to the occupational tax-@ Occupational taxes on coal

collected by municipality for the years 1974 to 1981 are presented in Table

5.1. The total occupational taxes collected have increased from less than
$20,000-00 per year in the early 1970s to $245,000-00 in-1981. Virtually-all

of the increase has accrued to the City of Superior, which in 1981 accounted

for more than 80% of the total occupational taxes collected on coal.

The second occupational tax applicable to coastal energy facilities is the tax

on crude petroleum received at refineries. This tax was first imposed in 1957
at a rate of 2-1/21 per,ton re -- ceived. In 1977, the occupational"tax on crude

petroleum was doubled to 5e per ton, which represents approximately 2/100-of

one percent of the present delivered cost of crude. Wisconsints only

petroleum refinery, operated by the Murphy Oil Company, is located in

Superior. The amounts collected, for the years 1974 to 1981 range from

$33,000-00 to $87,000.00 (see Table 5.2). All of the receipts are retained by

the collecting jurisdiction, the City of Superior.

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TABLE 5.1

OCCUPATIONAL TAXES COLLECTED ON COAL DOCKS,
BY COLLECTING MUNICIPALITY, 1974-1981

1974 1975 1-976 1977 1978 1979 1980 1981
Ashland 4 595.'21 4,448.00 3,447.66 2,044.92 t 6,670.75 $ 9,302.65 t 15,931.95 11,946.55

Green Bay 7,076.97 5,738.71 5,929.33 5,05.83 24,666.09 20,590.12 26,009.55 19,625.20
La Crosse* 329-80 259.87 213.13 217.41 1,324.62 854.11 880.76 928.24

Manitowoc 41,820.00 1,592.:64 1,717.23 2,178.24 6,708.20 3,435.85 3,138.85 2,675.15

Marinette 243.30 65.67 32.46 33.00 104.70 73.80 97.10 76.00

Milwaukee 1.827.46 990.54 296-59 864.08 873.41 1,433-57 756.47 2,930@62

Prairie du Chien* 37.50 17.93 .00 88.74 24.68 44.50 274.00 524.60

Racine 30.85 21.60 10.32 .00 .00 .00 .00 .00

Sheboygan 1,268.67 79.04 996.41 440.91 1,498.80 4,524.40 8,143.50 5,361.15

Superior., 53.40 53.40 2,511.66 57,526.18 144,433.40 128,619.45 215,471.25 201,155-05

State Total, $17,283.16 .$13,267.40 $15,154.79 $68,589.31 $186,304.65 $168,878.45 4270,703.43 $245,222.56

Mlsslssippi@ River Docks

Source: Bureau of-Coastal Management, Wisconsin Department of Administration.

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TABLE 5.2

OCCUPATIONAL TAXES COLLECTED ON PETROLEUM'REFINERIES
CITY OF SUPERIOR, 1974-1981

1974 $ 45,082.48

1975 32,540.55

1976 33,681-83

1977 39,768-05

1978 87,373.70

1979 59,670.75

1980 80,068-65

1981 64,799-30

Source: Bureau of Coastal Management, Wisconsin Department of Administration.

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6.0 Distribution of Local Tax Revenues by Community

Local tax revenues from coastal energy facilities in 1981 are summarized in

Tables 6.1 and 6-2.

Payments to municipalities totalled $4,248,822 in 1981. The City of Superior

was the largest single receipient with $1,364,485, more than 32 percent of the

total payments to municipalities. The Cities of Milwaukee and Oak Creek each

received more than $600,000. The City of Green Bay, the Town of Pleasant

Prairie,, and the Town of Carlton each received more than $300,000.

Payments to counties totalled $2,645,517. Kenosha County was the largest

single recipient, with $625,607, or almost 24 percent of the total payments to

counties. Kewaunee and Milwaukee Counties each received more than $500,000,

and Manitowoc received almost $500,1000. All four of these counties benefited

by the distribution of revenues under the utility portion of the shared tax

formula.

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TABLE 6.1

COASTAL ENERGY FACILITY TAX PAYMENTS TO COMMUNITIES, 1981

SPECIAL UTILITY OCCUPATIONAL LOCAL PROPERTY
COMMUNITY PAYMENTS TAX PAYMENTS TAX PAYMENTS TOTAL

Ashland $ 23,939 $ 8,363 $ 18,474 $ 50,776

Carlton 300,000 0 300,000

Green Bay 75,000 13,738 259,300 348,038

Hanitowoc 4,473 1,872 ..9,546 15,892

Marinette 2,033 53 N/A 2,086-

Milwaukee 412,574 2,051 271,157 685,782.

Oak Creek 601,641 0 0 601,641

Pleasant Prairie 300,064 0 0 300,0641.

Port Washington 75,000 0 0 75,000.

St. Francis 75,000 0
0 75,000

Sheboygan 171,153 3,753 .98,852 273,758

Superior 77,099 215,629 1,071,757 lp-364,485

Two Creeks 1@6,300 0 0 156,300

$2,274,276 $245,460. $11,729)086 $4,248,822

Source: Bureau of Coastal Management, Wisconsin Department of Administration.

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TABLE 6.2

COASTAL ENERGY FACILITY TAX PAYMENTS TO COUNTIES, 1981

SPECIAL UTILITY OCCUPATIONAL
PAYMENTS TAXES TOTAL

Ashland $ 17,447 $ 2,389 19,836

Brown 75,000 3,925 78,925

Douglas 18,301 40,231 58,532

Kenosha 625,607 0 625,607

KewaunIee 602,738 0 602,738

Manitowoc 473,652 535 474,187

Marinette, 41,922 1@ 41,937

Milvauk6e 564,688 586 565,274

Ozaukee 75,000 0 75,000

Sheboygan 102,409 1,072 103,481

Total $2,596,764 $48,753 $2,645,517

Source: Bureau of Coastal Management, Wisconsin Department of Administration.

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APP-ENDIX A

INVENTORY OF TAXABLE COASTAL ENERGY
FACILITIES, APRIL, 1982

COUM CITY/TO'.-4 FACILITY TYPF FACILITY NAME

kshland Ashland Coal Dock C. Reiss Coal Company
Ashland Power Plant layfront (LSDP)

Bayfleld -----

Brown Green Bay Coal Dock Fort Howard Paper Company
Green Bay Coal Dock Blue Line Coal Company
Green Bay Coal Dock C. Reiss Coal Company
Green Bay Power Plant Pulliam (WPSQ
Green Bay Pipeline Terminal Facilities Amoco Oil Company
Green Bay Pipeline Terminal Facilities Cities Service Oil
Green Bay Pipeline Terminal Facilities Apex Oil Company
Green Bay Pipeline Terminal Facilities Green Bay Products Terminal
Green Bay Pipeline Terminal Facilities Green Bay Terminal, Inc.
Green Bay Pipeline Terminal Facilities Koch Fuels, Inc. (ship only)
Green Bay Pipeline Terminal Facilities Mobil Oil Corporation
Green Bay Pipeline Terminal Facilities Fort Howard Paper Company (former ly Shell Oil
Company, Inc.)
Green Bay Pipeline Terminal Facilities U.S. Oil Company, Inc.

Door Washington Island Petroleum Storage/Transfer Amoco Oil Company
Power Plant Washington Island Electric Coop

Douglas Superior Coal Dock Superior Midwest Energy Terminal
Superior Power Plant Winslow (SWPL)
Superior Petroleum R&finery & Terminal Murphy Oil Corporation
Superior Pipeline, Terminal Facilities Amoco Oil Company
Superior Pipeline Terminal Facilities Union Oil Company of California
Superior Pipeline Terminal Facilities Lakehead Pipeline Company
Superior Pipeline Terminal Facilities Williams Pipeline Company

tron

Kenosha Pleasant Prairie Power Plant Pleasant Prairie (WEPCO)

Kewaunee Carlton Power Plant Kewaunee (WPSC)

Manitowoc Manitowoc Coal Dock C. Reiss Coal Company.
Manitowoc Power Plant Manitowoc (Municipal)
Two Creeks Power Plant Point Beach (WEPCO)
Two Rivers Petroleum Storage/Transfer U.S. 011,Company (served by ship)

Marinette Marinette Coal Dock Marinette Fuel and Dock
Fewer Plant West Marinette (WPSC)

Milwaukee Milwaukee Coal Dock Solvay Coke Company
Milwaukee Coal Dock Hometown, Inc.
Milwaukee Coal Dock Schneider Fuel
Milwaukee Power Plant Commerce (WEPCO)
Milwaukee Power Plant East Wells (WEPCO)
Milwaukee Power Plant Valley (WEPCO)
Milwaukee Pipeline Terminal Facilities Tanco Terminal
Milwaukee Pipeline Terminal Facilities Jacobus Company (Milwaukee Liquid Laken also
served by ship)
Milwaukee Petroleum Storage/Transfer Schwerman Marine Terminal (ship only)@
Milwaukee Pipeline Terminal Facilities Mobil Oil Company
Milwaukee Pipeline Terminal Facilities Shell Oil Company
Milwaukee Pipeline Terminal Facilities Marathon Oil Company
Oak Creek Power Plant Oak Creek (WEPCO)
St. Francis Power Plant Lakeside (WEPCO)

Oconto

Ozaukee Port Washington Power.Plant Part Washington (WEPCO)

Racine Racine Petroleum Storage/Transfer W. H. Pugh Oil Company (served by ship)

Sheboygan Sheboygan Coal Dock C. Reiss Coal Company
Sheboygan Power Plant Edgewater (WPL)
Sheboygan Petroleum Storage/Transfer C. Reiss Coal Company

Source: Bureau of Coastal Management, Wisconsin Department of Administration

kcd/51809

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DATE DUE

GAYLORDINo. 2333 PRINTEDINU.S.A.

6668 14108 2661