Legislator will try to close loophole that allows utility company to avoid paying property taxes in full
Springfield City Councilors call for Eversource to pay its tax bills
A Massachusetts state legislator says he will move to close a loophole in state law that is allowing a big utility company to withhold tens of millions of dollars in property taxes sought by cities and towns across the state.
State Rep. Orlando Ramos said it is “outrageous” that Eversource is paying just half the amount of property taxes it owes in dozens of municipalities while seeking abatements through a legal process that can drag out for years.
The first-term Democrat from Springfield said by his reading of the law, it was not written with a big multibillion-dollar corporation in mind.
“It wasn’t intended for Eversource to withhold 50 percent of what they owe, it was intended for the individual,” Ramos said.
He said what Eversource is doing may not be illegal, but it is wrong.
“And it is unfair because any customer of Eversource who disagrees with their energy bill is still required to pay their bill otherwise their services will be cut,” Ramos said. “It’s not fair Eversource requires that of their customers, but they are not willing to do the same.”
Currently, Eversource is litigating with 87 municipalities over the system used to value its property – things including streetlights, transformers, and pipelines.
In Springfield, where Eversource has challenged a decade’s-worth of tax bills, the company owns more than $44 million. The city is charging interest on the unpaid taxes to the tune of nearly $9,500 a day.
Once he writes the legislation, Ramos said he expects to get co-sponsors from the Springfield delegation and the other 86 cities and towns that are trying to collect from Eversource.
“I think there is an urgency here and so I am hoping that we’ll get a hearing as quickly as possible and we’ll be able to correct this loophole,” Ramos said.
The issue with Eversource withholding years of unpaid taxes was brought to light last August by Springfield City Councilors Mike Fenton and Tim Allen. The City Council unanimously passed a resolution calling on the company to pay up.
Last week at a City Council committee hearing on an Eversource natural gas pipeline project, Fenton confronted company officials.
“Your company has been withholding over $44 million, $9,000 in interest each day,” Fenton said. “When will you pay it and why haven’t you?”
He noted that Eversource has yet to win any of its appeals for tax relief.
“Please drop your case and pay your bills,” Fenton said.
Eversource spokesman Joe Mitchell said the company is challenging a valuation system it believes to be flawed and lacking in transparency.
“Because the taxes that we pay are ultimately reflected on the customers’ rates, it is our responsibility to challenge a municipality’s valuation if it is determined to be excessive,” Mitchell said.
He said the company remains open to negotiating a settlement with the municipalities.