City Councilors in Springfield, Massachusetts are calling out a big public utility company for not paying its tax bills.
Each year for the last decade, Eversource -- the largest energy provider in New England -- has challenged the assessed value the city of Springfield has put on the utility’s power lines, transformers, and other equipment to calculate its property tax bill.
Typically, if there is a dispute over the valuation of a property by a municipality, the tax bill must still be paid in full while the disagreement is sorted out.
But, City Councilor Mike Fenton said Eversource is taking advantage of a loophole in state law that allows it to pay only half the personal property taxes owed while appealing the valuation.
“It’s just completely unfair,” Fenton said.
Eversource’s outstanding tax debt to the City of Springfield amounts to about $44 million.
Each day the utility company does not pay the taxes owed, the city adds roughly $9,500 in interest to the bill.
“It’s reached a boiling point and it would be completely unacceptable for anyone of us to not pay our property taxes or not pay our every-increasing Eversource electric bills,” Fenton said.
Fenton researched the issue along with City Councilor Tim Allen, who said the Council and the city administration will work together to find a way to collect what is owed.
“We know everybody is a bind trying to collect this money and we saw it as an opportunity for us to work in unison with the administration to go after Eversource however we decide to do that to try to collect this money,” Allen said.
In 2020, the state appellate tax board upheld Springfield’s assessment on Eversource’s property for the fiscal year 2012 tax bill. Eversource appealed that decision. The board has not ruled on the disputes for fiscal years 2013-21.
City Councilor Jesse Lederman said it is “outrageous.”
“They could continue to string us along for years all the while keeping these funds in their coffers and reimbursing their shareholders,” Lederman said.
T.J. Plante, the city’s chief finance officer, said there is no incentive at this point for the city to negotiate a settlement with Eversource.
“The city of Springfield is not cash poor,” Plante said. “We are not in a situation where we are going to give away money that is owed to the city that goes toward services: police, fire, DPW, schools, all that stuff. We are not prepared to give any of that away just because they (Eversource) chose not to pay us.”
During a recent meeting, Councilors discussed ways they might pressure Eversource – a Fortune 500 company that reported $1.2 billion in earnings last year – to pay up.
City Council President Marcus Williams vowed that some action will be taken.
“Eversource needs to pay its bill,” Williams said. “It is that simple.”
In a statement emailed to WAMC, Eversource spokesman William Hinkle said because the taxes the company pays are ultimately reflected in the rates customers are charged, Eversource has a “responsibility to challenge a municipality’s valuation if it is determined to be excessive.”
He went on to say, “we always remain committed to working with the city in good faith toward an equitable result for Springfield and our customers.”
