Morgan County School System must wait on benefits from Stanton Springs’ Baxter
Walton, Newton school boards already approached by Joint Development Authority regarding tax abatement
By Michael Prochaska
In the interest of securing a tax abatement policy for Baxter International, the Joint Development Authority of Jasper, Morgan, Newton and Walton counties sought approval this month from the Walton and Newton Board of Education in abating school tax.
The Morgan County School System was not notified because Stanton Springs, on which Baxter will sit, lies within Walton and Newton counties. Regardless, Morgan County will eventually receive 15 percent of taxes collected because it has a 15 percent investment in Stanton Springs.
The estimates of taxes collected during a 10-year period under that estimate are between $31 and $49 million for the four counties, assuming that Baxter would receive FDA approval by 2017. Baxter is anticipated to be in full operation between 2017 and 2020, according to reports.
The abatement agreement follows that only nine percent of appraised value would be taxed the first year, increasing incrementally every year until the 11th year, in which 100 percent of taxes would be collected.
Authority Attorney Andrea Gray said that the four counties would receive only $280,000 without Baxter and that the Newton County Board of Education could receive between $8 million and $12.6 million over a 10-year period.
Gray did not have estimates on how much Morgan County Schools would receive because calculations would be subject to future millage rates and other factors.
Gray also met with Morgan County Superior Court Judge William Prior last Friday afternoon to begin the process of validating bonds for Baxter.
The Authority passed a resolution the previous night to move forward with the validation process.
It stated that the Authority would issue the bonds in the amount of $1.136 billion – the amount of capital investment Baxter agreed to in the inducement contract.
The bonds would not constitute a debt or general obligation on behalf of any of the four counties, according to the resolution, which also absolved any personal liability for members of the JDA.
Gray called it a “phantom bond,” or self-purchased bond transaction.
“When they (Baxter) are making payments on the bonds, they are basically paying themselves,” she said.
Baxter has also agreed to pay the Authority’s legal fees up to $25,000, Gray said.
A Superior Court hearing is scheduled at the Morgan County Courthouse July 11 at 8:15 a.m. The Court will also hear the validity of the Authority’s lease agreement, an Indenture of Trust and Tax Validation agreement.
The Authority also discussed a water and sewer plan to run a gravity line from Baxter to a future wastewater treatment plant.
JDA Chairman Alan Verner said the JDA will need to seek easements into the near future.
Verner also said he anticipates closing on all necessary contractual agreements with Baxter by the end of July.
Printed in the June 28, 2012 edition