A county auditor who is challenging the tax valuation of a controversial gas pipeline in Northeast Ohio is now asking the Ohio Supreme Court to decide whether he has the right to make that challenge in the first place.
Craig Snodgrass, Lorain County’s auditor, has been fighting the valuation of the NEXUS pipeline since it was decided last summer. The state tax commissioner settled with NEXUS that it could pay at a rate of 58% of the pipeline’s initial value.
Public entities near the path of the pipeline, such as schools, were set to receive millions of dollars in tax revenue from NEXUS when it was first constructed. The 58% settlement means schools are losing out on essentially half of what they were originally promised, Snodgrass said.
“If they can receive these funds that, we believe, we are entitled to, they don’t have to go back to our homeowners, they don’t have to go back to the taxpayers and say ‘Hey, we need this money,’” he said. “They can do a lot of good things with that money that they won’t have to go and ask the taxpayers for.”
Snodgrass appealed the decision but hit a roadblock when the state’s Board of Tax Appeals sided with NEXUS, which had argued Snodgrass did not have jurisdiction to appeal.
The Ohio Revised Code gives county auditors the “statutory right to appeal” final tax valuations of pipelines, Snodgrass said. That’s why he’s decided to appeal to the state Supreme Court.
“We’re not talking now about a valuation issue. We’re talking now about the checks and balances of government and the rights of county auditors,” Snodgrass said.
NEXUS is standing by the final agreement.
"NEXUS continues to support the finality of the settlement agreement which provides additional revenue and certainty to local school districts. Given that Lorain County has filed an appeal, the formal litigation process will continue," NEXUS spokeswoman Kristen Henson said in a statement.
When the NEXUS pipeline was completed in 2018, the state tax commissioner set the value of the pipeline at $1.4 billion statewide. NEXUS appealed the state’s valuation multiple times over the course of several years, disputing how much the pipe was actually worth. During that time, it paid schools about 40% of the valuation.
The state ordered an appraisal and settled with NEXUS last year, revaluing the pipeline for $950 million.
The Oberlin City School District in Lorain County was supposed to get nearly $2 million per year, but under the June settlement, that was cut almost in half - down to $1.1 million, Snodgrass said. Oberlin and other districts had planned to use NEXUS funds to construct new school buildings.
In Medina County, the Cloverleaf Local School District was initially supposed to receive about $7.4 million in 2019 from NEXUS. That dropped to $4.3 million in the final valuation.
The projected revenue from NEXUS gave the district the push it needed to finally construct new school buildings, Superintendent Daryl Kubilus told Ideastream Public Media in a 2022 interview.
Cloverleaf is still able to use the reduced revenue to build a new joint middle and high school building but will likely have to go to the voters to ask for operating funds, he added.
“Little did we know that they were seeking a little over one-third of the same numbers that they were broadcasting as a reason for us to be excited about them,” Kubilus said.
The pipeline goes through 13 Ohio counties, including Summit, Medina and Stark.
Part of the reason Snodgrass is continuing on with his appeal is to protect the rights of all county auditors across the state, he added.
“No one person, no one office should have all total authority. That’s not what we’re founded on,” Snodgrass said. “It is founded on checks and balances and having a voice, and being able to ask questions and having transparency of government.”
