Power plant tax dispute risks shuttering Texas community hospital: 5 things to know

Efforts by Dallas-based electric company Luminant to drive down its property taxes are putting Glen Rose (Texas) Medical Center at financial risk, according to a report from Texas Observer, an investigative newspaper.

Here are five things to know about the situation, based on the Texas Observer report.

1. Luminant is currently embroiled in a legal battle over the valuation of several of its coal and nuclear power plants. The plant nearest GRMC is the Glen Rose-based Comanche Peak nuclear power plant, which was valued at $2.4 billion by the local appraisal district in 2015. Luminant sued, claiming the facility was only worth $450 million. A judge upheld the local appraisal district's valuation in March, but the electric utility appealed and the case is back in the courts, according to the report.

2. While the dispute is being ironed out in the courts, by state law Luminant only has to pay property taxes on its $450 million valuation of Comanche Peak. Because the nuclear plant accounts for 80 percent of the community's property taxes, this is putting significant financial strain on Somervell County government, school district and the community hospital, according to the report.

3. The hospital tax district that funds GRMC lost $2.4 million in revenue in 2015. The hospital district is just three years old, meaning it does not have the cash reserves to weather the Luminant dispute. As a result, the hospital cut staff by 7 percent, froze raises, eliminated its retirement match and increased employees' share of health benefits, according to the report.

4. Luminant's appeal will likely not be resolved until late 2017, and the Texas Observer predicts it is likely the company will sue again, this time over 2016 valuations. Luminant claims Comanche Peak is worth $261 million as of 2016, but the district's appraisal came in at $1.8 billion, according to the report.

5. The Texas Observer notes some of GRMC's financial woes are not due to the Luminant dispute. In an interview with the Texas Observer, a Somervell County resident indicated the hospital built a clinic in Hood County, which is outside of the tax district.

Read the full report here.

 

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