Abound Solar Collapse Could Leave Taxpayers on the Hook for Shortfall
Michael Sandoval /
Abound Solar’s June bankruptcy could leave the residents of Weld County, CO, on the hook if court proceedings do not deliver the projected business personal property tax receipts anticipated before the company’s demise. The Greeley Tribune reports:
Abound owes more than $950,000 in property taxes this year and will owe a similar amount next year, totaling about $1.8 million in business personal property tax that was not collected before the solar panel plant filed for bankruptcy in July.
The county has a good chance of getting the money, said John Lefebvre, Weld County treasurer.
But until then, a number of taxing districts in the southwest corner of the county that received payments from Abound may have to brace for major budget cuts.
The largest portion of Abound’s taxes each year goes to St. Vrain Valley School District, at $513,000 owed this year, followed by Mountain View Fire Rescue, at $126,000.
A “good chance” is no guarantee, however, and as the report from the Tribune explained, budget shortfalls as a result of Abound’s failure to pay the business personal property taxes could hit the county’s residents and other property owners through a raise in mill levy taxes.
Weld County, under Colorado law, is first in line to receive payment from Abound, Lefebvre said. About $37 million worth of equipment at the plant could be seized by the county and sold to make up the difference in taxes, but Abound’s headquarters were based in Delaware, where some corporate laws are different, and where the bankruptcy case is in process, he said.
If schools and other districts don’t collect the amount of taxes they need, there may be an abatement process they can go through with the county assessor and commissioners, and they may be able to add to their mill levy to make up for the lost revenue the next year, Lefebvre said.
The county has enacted other safeguards in anticipation of a situation like Abound Solar’s closing, but the “safety net,” as they describe it, leans heavily on the property taxes paid by the oil and gas industry.
Weld County treasure John Lefebvre summed up the sector’s contributions to county’s financial health, calling oil and gas payments “very timely.”
As the article notes, “the likelihood of the oil and gas companies, most of which are major corporate players, going bankrupt in the area is highly unlikely” in Lefebvre’s estimation.
Weld County Commissioner Sean Conway agrees. He pointed to Noble Energy and Anadarko, two oil and gas companies out of a total of 31 in the resource-rich county in northern Colorado, which paid $109 million in 2011 property taxes, more than double their 2010 tax bill.
Abound Solar’s bankruptcy could cost taxpayers between $40 million and $60 million. The company had tapped into about $70 million of the $400 million Department of Energy loan guarantee it had received from the agency in 2010.