ANDERSON – If the proposed Mounds Lake reservoir becomes a reality by 2021, local taxing units could lose an estimated $1.9 million in revenues.
But projected losses could be absorbed by local government units or spread out over increased assessed valuations, officials said.
Rob Sparks, executive director of the Corporation for Economic Development, said the proposed $450 million reservoir will affect 80 businesses, 80 homes and 270 modular homes if it is constructed. The majority of those businesses will be in the city of Anderson with water covering Mounds Mall and shopping centers on the east side of Scatterfield Road.
Anderson Community Schools could lose up to $619,401 in tax collections and the Daleville Community Schools would see a projected decline in revenues of $137,345.
The city of Anderson could experience a decline in revenues of $576,673 and Madison County would see a decrease of $263,578.
Additionally, the tax loss in Delaware County is estimated at $364,134 and for Madison County taxing units the loss in revenues is $1,597,227.
Sparks said the assessed value is expected to increase once the reservoir becomes a reality through the construction of new homes, housing additions and the relocation of businesses.
He said in the short term the proposed Mounds Lake Commission, which would oversee the operation of the reservoir, would have to absorb the costs to the local units of government.
“There would have to be a payment in lieu of property taxes,” Sparks said. “In the long term there will be an increase in the assessed value as a result of the reservoir.”
Kevin Brown, business manager for Anderson Community Schools, said the $619,401 tax loss to the school system would depend on how it was calculated. He was unsure if the figure took into account the state-mandated tax caps and any tax increment financing district. Another factor when it comes to school finances is declining student enrollment.
“We’re not interested in the loss of $600,000 in revenues,” Brown said. “We work hard to make the best use of our available funds.
“Any more loss would be problematic,” he said.
Brown said if the Mounds Lake Commission offsets the loss of revenues it would maintain the status quo.
“Existing businesses add equipment and expand,” he said. “That increases the assessed value.”
Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.