Coal drives decrease in assessment values
WAYNESBURG – With coal making up such a large part of Greene County’s tax base, any downturn in the industry like the one being experienced now is bound to have a negative impact on tax revenue collected by local municipalities and school districts.
During the past year, the total assessed value of coal declined by about 10 percent, removing $49.9 million in value from the county’s tax rolls, according to a report on 2013 taxable values prepared by the Greene County Assessment Office.
The decline in coal values was offset by increases in land value and land improvements; however, those increases were not enough to avoid a 3 percent decline overall in property value for the county this year.
Greene County’s total assessed value declined from $1,573,407,146 last November to $1,529,505,046 this month.
The decrease of $43,902,100 in value included a $49,986,030 reduction in the value of coal, a $663,230 increase in the value of land and a $5,420,700 increase in the value of improvements.
The information is prepared by the assessment office to assist the county and municipalities in preparing their annual budgets, letting local officials know how much revenue will be generated by current or proposed millage rates.
Coal now makes up about 31 percent of the county’s total property valuation. “It was almost 50 percent when I first started here,” said John Frazier, the county’s chief assessor. That was about 17 years ago.
Since that time, mines have closed and coal has been mined and removed from the tax rolls.
The health of the coal industry plays a role in determining value because coal is assessed on an income approach to valuation.
The calculation to determine a per acre value takes into account such factors as the price of coal on the open market, its quality and marketability as well as a mine’s productivity, Frazier said.
Several factors impacted the value this year, Frazier said.
Low demand resulted from, among other things, a switch from power generators to natural gas, last year’s warm winter and less than solid economic growth.
Coal prices declined significantly, Frazier said. In addition, productivity at some mines was down because of poor mining conditions or equipment problems.
All of this resulted in the county seeing less activity by coal companies to permit new coal areas or to change coal status from reserve to active, Frazier said. Active coal, which is expected to be mined soon, is given a higher assessed value.
In some areas of the county, the decline in the value of coal on a per-acre basis was not so much the main determining factor.
In some municipalities – Richhill Township, for instance – a large amount of coal has simply been mined and removed from the tax rolls.
Last year, coal also had been the big determinant in the county’s overall value, but last year, it helped boost total property value by 4 percent.
Coal values can change one year to the next, Frazier said. “They can go up or down quickly, The market is very volatile,” he said. Frazier said he always warns municipalities and school districts about the possibility of fluctuations in value.
As is in most years, some municipalities are winners and some are losers.
Franklin Township, which last year saw a $28 million increase in total value, primarily because of coal, this year saw a drop of $18.2 million, primarily for the same reason.
The value of coal declined, and some coal that was active was moved to reserve. Emerald Mine, which mines in the area, also experienced some poor mining conditions during the year.
“We hate to lose the money, but hopefully it will come back in time,” Franklin supervisor Reed Kiger said.
The change should not have too hard of an impact on the township’s budget, he said. “We’re in good shape; we’re financially sound.”
Wayne Township saw a decline in coal value of more than $9 million this year. “Every year, it’s down a little bit due to coal depletion,” Supervisor C. Bryan Cole said.
Much of the coal mined in the township by the Blacksville Mine is depleted, and though an Alpha Natural Resources mine has begun mining there, that only means more coal will be removed from the rolls, he said.
The township still sees a benefit from wage taxes collected from miners at the Blacksville Mine’s Kuhntown portal. But that eventually will close.
The supervisors have to take all this into account in preparing budgets. “Basically, what we have to do is be a little bit more conservative,” Cole said.
One area where coal values are increasing is Morris and Washington townships as Consol Energy’s Enlow Fork Mine expands into the area.
Washington Township, which Emerald also will mine, saw a $3.3 million increase in value this year for coal.
Supervisor Correan Stewart said the mining will help the township now, but hurt it later.
“It will take our tax base; once it’s gone we’ll have no tax base left,” she said. The township plans to save some of the additional revenue it will receive from coal so down the road “we can try to keep people’s taxes down,” she said.
One municipality also saw an unusual large decrease in value this year.
Waynesburg Borough’s value declined by more than $1.1 million: $408,770 in land value and $717,155 in improvement value.
Assessment records indicate much of the loss, $971,670, resulted from Waynesburg University changing the status of 36 properties it owns from taxable to tax exempt.
Roy Barnhart, senior vice president of finance and administration, said the university reviewed the status of its properties this year at the request of the assessment office.
The university has not been very aggressive in changing the status and many properties which qualify to be tax exempt have remained on the tax rolls for years, he said.
“Many of them could have been removed, some of them years ago,” Barnhart said. Some of the properties are homes being used for student housing, others student parking areas. All were determined to be tax exempt by the county’s tax appeals board, he said.
The loss of the $971,670 from the tax rolls for the borough, which levies a 9 mill property tax, equals a loss of $8,745 in tax revenue a year.
Barnhart noted the university continues to assist the borough in other ways. For example, he said, it donated $38,000 to the borough this month to purchase a new police car.