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Jersey Town Fights Exxon Mobil
6 ABC (Philadelphia) | 10/14/08 | Lisa Thomas-Laury

Posted on 10/14/2008 8:56:07 PM PDT by denydenydeny

Paulsboro, N.J. - October 14, 2008 - (WPVI) -- Paulsboro, New Jersey has long been known as a middle class town with an industrial edge.

But now the borough is in a fight with ExxonMobil, its biggest tax payer, and that is putting a drain on the entire community.

"This plant, when it was built, actually saved Paulsboro from a standpoint of its financial structure because its a wonderful neighbor and a contributor to the tax base. Until now." said Paulsboro Mayor John Burzichelli. That's because six years ago ExxonMobil appealed the assessment made on its lube plant located at Billiingsport Road.

The plant is the borough's largest tax payer, and the bread and butter of this community.

But for 6 years, the two have been embroiled in a tax lawsuit.

"The fine line of discussion is what's real property, in other words what you assess for property taxes, and what's personal property," Burzichelli said.

ExxonMobil says it has paid unfair tax bills, resulting from an above fair market valuation since 2002.

But Mayor John Burzichelli paints a different picture of Exxon, which turned a record profit this year of close to $12 billion in its second quarter.

"We have a situation where a very large industrial neighbor has chosen to exploit the tax code not because they had to for their survival. They chose to because they could," Burzichelli said.

That code, the New Jersey Business Retention Act, was passed in 1992, to help small and mid-ranged businesses become more competitive in the state.

But, the mayor claims it has unintentionally shifted the local tax burden from the industrial tax payer to homeowners. "In those early years of the appeal we felt very strongly that we could defend the assessment," Burzichelli said.

However, each year ExxonMobil appealed, and last year offered the borough a settlement. It would accept compensation in the form of lower tax assessments and, in return, it would not ask for a cash refund of taxes it had overpaid.

"So it was assessed at roughly $46 million and when it all finishes and all is said and done, it will probably be less than $20 million," Burzichelli said.

What that means to Paulsboro is a huge financial hardship.

Last year, ExxonMobil paid the borough close to $1.9 million in taxes.

This year, it will be paying just under $1.3 million, or nearly $600,000 less. Then in four years, by 2012, the company will owe only a projected $816,000 tax bill.

The mayor says big oil is taking advantage of Paulsboro, and it's having catastrophic effects on its residents. Taxes are going up while services are being cut.

"We will end up with less police officers, numbers still to be determined. We'll end up with less street highway people, the number still to be determined. And we're still looking at what else we can cut internally," Burzichelli said.

Superintendent Frank Scambia says the district has cut $450,000 from its school budget, eliminating teachers, support staff, activities and athletic programs. "Our people are concerned that the kids don't suffer because of the loss," Scambia said.

The impact stretches farther into the community. Residents are receiving larger tax bills.

Bruce Meyers will be paying $800 more this year. "This is the biggest jump I've seen, I couldn't believe it," Meyers said.

Although a settlement between the borough and ExxonMobil appears to have been reached and even put in motion, the mayor has yet to sign it.

Burzichelli says ExxonMobil is holding up the process. ExxonMobil blames the Mayor for the delay.

The company also regrets any negative impact this has had on Paulsboro residents, and says it gives back to the community in various ways.

ExxonMobil sent the following statment: For each year beginning in 2002, ExxonMobil paid what it believed to be unfair tax bills resulting from an above fair market valuation of the Paulsboro Lubes Plant. Each year ExxonMobil filed an official appeal with the New Jersey State Tax Court.

In 2007 ExxonMobil proposed a settlement option to the Borough of Paulsboro which did not include any cash refunds of the taxes which had been overpaid since 2002. To relieve the potential financial burden an immediate full refund would have on the Borough, ExxonMobil offered to accept repayment of the overpaid taxes via lower tax assessments over the next few years (beginning in 2008). A verbal settlement agreement was reached in 2008, but a formal agreement has not been signed. It is disheartening that Paulsboro officials based annual budgets and municipal expenditures on tax payments which were disputed and potentially would have to be refunded. The Lube Plant and its 125 employees are an integral part of the Paulsboro Community and are committed to being good neighbors.

ExxonMobil regrets any negative impact on Paulsboro residents resulting from this protracted situation. " Additionally, ExxonMobil sent Action News a list of contributions it says it makes to the Paulsboro community.


TOPICS: Extended News; Government; News/Current Events; US: New Jersey
KEYWORDS: energy; exxonmobil; paulsboro

1 posted on 10/14/2008 8:56:07 PM PDT by denydenydeny
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To: denydenydeny
Oops! Link here.
2 posted on 10/14/2008 8:57:31 PM PDT by denydenydeny ("[Obama acts] as if the very idea of permanent truth is passe, a form of bad taste"-Shelby Steele)
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To: denydenydeny

Lemme guess. Democrat dominated town raises taxes on largest employer in town and then casts them as the big greedy corporation for challenging those tax increases?


3 posted on 10/14/2008 8:58:43 PM PDT by Harry Wurzbach (Rep. Thaddeus McCotter is my hero.)
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To: denydenydeny
Superintendent Frank Scambia says the district has cut $450,000 from its school budget, eliminating teachers, support staff, activities and athletic programs. "Our people are concerned that the kids don't suffer because of the loss," Scambia said.

One wonders how much of a cut was applied to the superintendent's compensation. And, yeah, I'm sure the school district is the model of efficiency. I bet they let the teachers who were actually competent go.
4 posted on 10/14/2008 9:01:14 PM PDT by Harry Wurzbach (Rep. Thaddeus McCotter is my hero.)
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To: denydenydeny
the mayor claims it has unintentionally shifted the local tax burden from the industrial tax payer to homeowners

The Mayor is an unintentional idiot

5 posted on 10/14/2008 9:03:12 PM PDT by eyedigress ( My first 4 wheeler was on the rocks in Fairbanks)
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To: Harry Wurzbach
"Lemme guess. Democrat dominated town raises taxes on largest employer in town"

Ding!Ding!Ding!Ding!Ding! We have a winner!

Without Exxon-Mobil Paulsboro has no tax base. The Mayor is a double dibber, he is also a state assemblyman. Republicans aren't even fielding candidates for council.
6 posted on 10/14/2008 9:28:29 PM PDT by Free_SJersey (THE GOVERNMENT THAT GOVERNS LEAST, GOVERNS BEST.)
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To: eyedigress

This guy being a typical dim believes that the taxpayers work for the government and not the other way around.

Here’s his bio and he is a double dipping dim!

Assemblyman
John J. Burzichelli (D)
(Deputy Speaker)
DISTRICT OFFICE ADDRESSES:

935 Kings Highway
Suite 400
Thorofare, NJ 08086

14 East Commerce St.
3rd Floor
Bridgeton, NJ 08302

1 New Market St.
Salem, NJ 08079

PHONE NUMBERS: (856) 251-9801 (Thorofare)
(856) 455-1011 (Bridgeton)
(856) 339-0808 (Salem)

ELECTRONIC MAIL: Contact Your Legislator(s)

BORN:

November 14, 1954

OCCUPATION:

Owner/Producer/Distributor, Hill Studio & Scenic

PUBLIC/PARTY SERVICE:

Borough of Paulsboro, Mayor 1996-present

LEGISLATIVE SERVICE: General Assembly 2002-present, Deputy Speaker 2006-present, Assistant Majority Leader 2004-05

COMMITTEES:

Tourism and Gaming, Chair
Budget
Budget Committee (Budget Hearings Only)
Homeland Security and State Preparedness
Legislative Services Commission

BILLS SPONSORED: List of Bills Sponsored by Assemblyman John J. Burzichelli


7 posted on 10/14/2008 9:29:47 PM PDT by appeal2 (Brilliance is typically the act of an individual, but great stupidity is reserved for the Gov't)
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To: eyedigress
I do not think the mayor is misinformed. He wants to tax non residents for local services. If you assume that the higher taxes will be paid by consumers of Exxon Mobil products, most of these consumers will be non residents. I do not see this taxation scheme as much different than outrageous taxation of tourism. The tourist taxes (hotels, rental cars, airport surcharges, ...) may reduce local demand however. The mayor probably feels that excessive taxation at the local level will not have much of an impact on prices, employment, and energy production. The excessive taxation of the energy industry proposed by the rats will decrease energy production, increasr prices, and lower employment.
8 posted on 10/14/2008 9:37:30 PM PDT by businessprofessor
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To: businessprofessor
I do not see this taxation scheme as much different than outrageous taxation of tourism.

While you are, of course, correct, it is no worse than the State of Texas, which levies a "severance" tax on every barrel of oil pumped out of the ground. The tax is merely added to the price of the oil, which is then sent all over the country. Essentially, Texas has managed to export their taxes to the rest of the country...

9 posted on 10/14/2008 9:47:39 PM PDT by CurlyDave
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To: businessprofessor; All

This is a property tax, right?

So it’s meant to pay for services provided.

Since I bet the plant has it’s own security, probably it’s own fire service, pays for it’s water and sewage use, the only services it needs are the roads in for it’s workers.

The city is being greedy....:^)


10 posted on 10/14/2008 9:52:09 PM PDT by az_gila (AZ - need less democrats)
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To: denydenydeny

Schools are usually a municipality’s largest expense. Does this refinery send any children to local schools? Or do the children in town have parents and live with them?


11 posted on 10/14/2008 9:56:16 PM PDT by Koblenz (The Dem Platform, condensed: 1. Tax and Spend. 2. Cut and Run. 3. Man on Man)
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To: CurlyDave
You are correct about severance taxes. I believe that every state assesses severance taxes although the name of the tax can vary. Severance taxes have some justification for capturing damage done by energy exploration. However, I believe that severance taxes are generally seen as a cash cow to tax non residents. Alaska is the king of severance taxes in terms of percentage of state tax revenues. Excessive severance taxes are counter productive since every state imposes them. Taxpayers across states should demand lowering of severance taxes.

The excessive property taxation in the Jersey town is different in that Exxon Mobil has a strong legal case. I applaud Exxon Mobil in protecting their shareholders from another excessive taxation scheme.

12 posted on 10/14/2008 10:02:09 PM PDT by businessprofessor
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To: CurlyDave
If you don't want to compensate Texas for the irreplaceable resource that you are taking from that state, boycott Texas oil, and make the Texans use all of it. Rent a rig and start drilling in your own back yard - good luck on getting the permits.
13 posted on 10/14/2008 10:07:24 PM PDT by PAR35
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To: Harry Wurzbach

Boeing? Seattle? Raise taxes and your employers will leave.


14 posted on 10/14/2008 10:19:13 PM PDT by Skenderbej
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To: Harry Wurzbach

More likely they didn’t raise the tax rates, but in collusion with the county tax assessor the property value went up to increase the amount tax paid at the same rate. That went on all over the country partially attributing to the housing bubble. Of course most home owners went along since their home value went up and thus they could sell their home at a much higher price.


15 posted on 10/14/2008 10:23:34 PM PDT by neb52
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To: Harry Wurzbach

I love the attitude of government towards business. That’s why I outsource instead of hiring.


16 posted on 10/14/2008 11:22:09 PM PDT by Jeff Chandler (Bill Maher: President Obama's press Secretary.)
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