Factor this into the GREAT Plan

Georgia lost a tax case today in the US Supreme Court.

The Supreme Court ruled unanimously today that railroads may challenge state methods for determining the value of their property, a decision that could lower some railroad tax bills.

The court sided with CSX Transportation Inc. in a case from Georgia in which the railroad argued that the state improperly instituted a new way of calculating its property tax that resulted in a nearly 50 percent increase in its tax bill from one year to the next.

The court reversed a ruling from the 11th U.S. Circuit Court of Appeals that prohibited the railroad, a subsidiary of CSX Corp., from challenging the method the state used to determine the value of the railroad’s property.

A federal law bars states from discriminating against railroads by taxing their property more heavily than other commercial property. Chief Justice John Roberts said the law allows a railroad to go to court to try to show that the state’s way of calculating market value is unfair.

6 comments

  1. dorian says:

    I don’t see how it factors in at all unless the railroad industry donates a large chunk of change to the speaker’s pac. Maybe then, railroads will be exempt in version 197,000 of this tax scheme.

  2. I’ll try. If the CSX Georgia property is assessed at 11.8 Billion for 2006.

    And the 2002 assessment vs 2001 (unknown variable) increase in valuation was 47% because Georgia used numbers from the Annual Shareholder report versus the Regulatory report. (what is a Regulatory Report?)

    And the “National” average unit price (CSX property value) for assessment value is 7.1 Billion. Except Florida, whose valuation is 12.1 billion.

    Then, if CSX successfully challenges the property assessment. Georgia’s Tax Refund Liability could go back as far as 2002.

    And Assuming the most recent 2006 Assessment (which you can’t) of 11.8 Billion vs the 7.1 National Average.

    But since we’re all addicted to ballpark math, let’s say a 4 Billion per year error for five years equals 20 Billion in over-Assessments.

    Then the 40% valuation of the 20 billion would be 8 billion excess value. And if the state tax rate on the 8 billion is .0002, then the state only owes CSX 1.6 million.

    But if the Counties, Cities and School Boards have been taxing CSX, the rate goes up to about 4.87%. So, if then a 4.87 refund is owed on 20 billion, the past liability could be 1 Billion.

    And the annual tax revenue loss going forward could be 200 million per year.

    But i’m going to let Glenn, Allen & Travis hash this out on their calculator which probably goes to a billion but mine doesn’t. Therefore this was all on the back of an envelope, which i am fixin to roll out to the street and/or recycle.

    I know this ain’t correct but might be close.

    you try it…

    the 2006 11.8 billion vs the National Average valuation of 7.1 billion figures come from the Supreme Court Argument.

    And i guess the Glenn Pennies tax will have to cover the Billion & 200 million per year AND the estimated GDOT 51 Billion Shortfall through 2035, at which time at least one of us will probably have gone to the great choo choo train blog in the sky…

  3. IndyInjun says:

    Don’t look now, but there is a similarly disastrous suit in Lincoln County in which Plum Creek Timber is appealing its assessments on land under long-term timber lease. The company’s grounds are the tremendous diminution of land values due to the lack of marketability.

    The company wants values even lower than the conservation use exemption value available to individuals, which is between $350 and $500 per acre.

    Bear in mind that standing timber is already not taxed due to a sweetheart deal about 12 years ago that deferred tax until harvest. Worst still, said law provides for essentially an honor system, with the result that the tax has fallen to around $13 million per year FOR THE ENTIRE STATE.

    The future tax losses are bad enough, but the cost of refunds and interest on the last three years of assessments could be a sledgehammer blow.

    Having TWO such revenue hemorrhages will be ruinous to some counties.

    Also, what happened to the $20 billion unfunded liability for state employee/retiree health care?

    Pile these things onto a potentially falling residential real estate base and we are looking at staggering tax increases.

  4. jsm says:

    So now the railroad still has to challenge the state’s appraisals of its property, before their tax bill changes. The court may find that Georgia’s calculations are correct.

  5. If 48 states say 7.1 Billion and Georgia’s brain trust say 11.8 billion and the CSX chief counsel gets paid 1.1 million plus 1.65 million in stock options; how much additional liability will Georgia incur in legal fees fighting the national valuation trend? And how much has already been spent taking this to the Supreme Court?
    (you’ll never know)

    I think it’s safe to move to Alabama about now and concede to their cerebral supremacy over the current Georgia Whirling Dirvish Brain Trust of Glenn and Cousin Sonny.

    Cecil, Robert, David, Allen, Nikki, Alan save us!

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