Tax overpayments

Marathon Petroleum is one of two companies getting tax refunds from the Boyd County School District because of past overpayments.

CANNONSBURG Two industry-owned properties in the Boyd County School District were evaluated improperly for tax purpose and the district has to refund hundreds of thousands of dollars to each, according to district finance director Don Fleu.

One property is the Marathon refinery at Catlettsburg, which overpaid at least $219,473 in utility taxes and the other is Cargill Inc., which owns a coal dock on the Big Sandy River and overpaid $317,396 in property taxes, Fleu said.

Marathon contended its utility tax bills should have been calculated according to a different schedule from non-commercial bills, and the state finance department agreed, Fleu said. Overpayments were $94,276 in 2015 and $125,197 in 2016; 2017 payments have not been finalized but there will be some overpayment to be adjusted, he said.

Cargill asked the state to change the method of valuing the coal at its property, contending it had been assessed as finished goods but should be considered unfinished because the coal is not fully processed for end users, he said.

The state granted its request, which resulted in overpayments in 2013, 2014 and 2015.

The refund to Cargill came from this year’s tax collections and the district has to adjust its budget accordingly.

The Marathon utility tax repayment was deducted by increments from monthly payments and because of the rate adjustment the district will get less per month on future bills.

“The hard part for the district was to absorb both reductions in the same year after the budget was set up,” Fleu said.

Workarounds include siphoning from the district’s contingency fund and putting some projects on the back burner.

Those include the soccer field under development adjacent to the new softball field — bleachers and lights are now on hold — and slowing down plans to consolidate preschool into the former high school building.

“It’s a big hit but we prepare for that,” board chair Bob Green said. “We have a contingency fund with money we set back for problems that come up.”

The refund is “something else we have to cope with,” he said. “We have a limited amount of money and we count on it year to year so if our taxes go down it hurts. But we’re in pretty good shape because we prepare for those kind of things through the year.”

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Mike James is The Independent's education reporter. He has covered news in Northeast Kentucky since 1996.