The new generators at OG&E’s Mustang Energy Center, which began operating Nov. 10, could increase the taxable valuation of the Yukon School District by a double-digit percentage.
The final amount won’t be known until this summer, but it will be substantial, noted Canadian County Assessor Matt Wehmuller.
Although his office assesses taxable value of residential and commercial property in the county, the Oklahoma Tax Commission determines that value for “public service corporations,” such as OE&E.
The increased valuation will greatly increase the tax dollars raised through the district’s bond issues, said Yukon Superintendent Jason Simeroth.
The increased valuation also will increase the district’s tax receipts for operating expense, but some or most of that increase may be offset by a reduction in state funding – based on an “equalization” formula designed to keep per-student funding for all school districts relatively equal.
“It’s thrilling,” Simeroth said. “Yukon doesn’t have a lot of industry, so we’re very fortunate to have this increase in our tax base.”
Yukon Schools are lucky; the new generators are at the extreme eastern border of the school district, off SW 10th Street and east of the John Kilpatrick Turnpike.
The increased bonding revenue should bolster the Yukon Schools’ money to build a new intermediate school (serving fourth, fifth and sixth graders), which is scheduled to open no later than the fall of 2021.
The “found” money also can help with future expansion within the district, such as another elementary school or perhaps increasing the capacity of the high school campus, Simeroth said.
Meanwhile, the Mustang School District – which houses two of the seven new OG&E generators – sees them as a wash.
“We have not been depending on the new plant for our budgetary needs,” Mustang Superintendent Sean McDaniel.
Here’s how the math on OG&E’s investment works:
- OG&E spent $390 million to install seven efficient new generators powered by Rolls Royce engines.
- Officials have told Mustang Schools that the two generators in their district are about the same value as the aging generating plant – located in the district – that OG&E is replacing.
- The value of the five generators in Yukon Schools is $279 million.
- This is new investment within the Yukon School District.
This is where Oklahoma state law comes into play.
Utility projects are valued at 22.85 percent of their worth in calculating property taxes. (This compares to 12 percent for residential and commercial property.)
The result is the taxable value of the five generators could be $64 million – depending on the final Tax Commission determination.
Pretty impressive, considering the current taxable valuation is $373 million. If the current estimate holds true, the Yukon School District valuation would rise 17 percent.
Wehmuller, the county assessor, cautioned that the Tax Commission looks at OG&E’s valuation statewide and that a change elsewhere in the state could affect its valuation for the Mustang Energy Center.
“Canadian County continues to be the fastest-growing county in the state,” he said. “We’re always pleased when our valuation increases because it improves our ability to provide public services.”
The increased valuation also will help the Canadian Valley Technical Center, which has campuses on South Czech Hall Road, on U.S. in the El Reno area and in Chickasha, Wehmuller said.
“Seventy to 75 percent of your property taxes and personal property taxes in Oklahoma go to education,” he said.