Independent Analysis Finds Plant Washington a Financial Risk

New Study Finds Prior Estimates Overstate Jobs and Revenue to County; County to Provide $66.4 Million Subsidy and May Need to Fund Infrastructure with New Taxes

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Sandersville, Ga. — Taxpayers in Washington County face serious risks and will likely not reap the financial and employment perks that supporters of the proposed Plant Washington are promising if the $2.1 billion coal-burning plant is built, according to an independent analysis released today by the Ochs Center. That assessment provided by the Ochs Center for Metropolitan Studies, a Chattanooga, Tenn.- based non-profit research group, shows that prior projections of new revenue for Washington County from Plant Washington may be off the mark and County taxpayers may be left holding the bag for new infrastructure costs.


David Eichenthal, a public finance expert (see bio below) who led the independent analysis, said the projected financial arrangements of the proposed 850-megawatt plant in Middle Georgia raise numerous red flags.

“This is a project that doesn’t provide what it purports to provide,” said Eichenthal. “The basis for past projections of new revenue for Washington County is unclear and appears to be based in part on unrealistic assumptions about the number of permanent jobs that will go to Washington County residents. There are also real risks to this deal when it comes to how plant construction and related infrastructure costs are financed. Rather than creating new jobs and revenue for the County, Plant Washington could lead to long-term financial risks for taxpayers. There’s a lot to be worried about because in a very real sense, Plant Washington is a fiscal pig in a poke.”

The independent review by the Ochs Center’s experts was meant to critically assess an earlier financial impact study done by the Washington County Chamber of Commerce, which proponents of the plant have cited in defense of the huge capital outlay for the plant that promises millions of dollars in new revenue for Washington County and the Washington County school district.

Other conclusions reached by Ochs Center’s analysis include:

* The Chamber of Commerce study relied on unknown assumptions and methodology. Although the Chamber of Commerce study states that it was based on data provided by the County, County officials denied that any information was provided.
* The County appears to be planning a $66.4 million tax abatement for the project. With projections of 128 permanent jobs, the tax abatement would be more than half a million dollars per job.
* Most new permanent jobs will not go to Washington County residents, resulting in less economic activity and less revenue to the County.
* In order for the plant to be built, Washington County would have to commit significant outlays of taxpayer dollars for public infrastructure improvements. No costs for new public infrastructure are included as offsets in the Chamber of Commerce study.
* The county faces significant unknown cost risks related to plant construction, leading to the possibility of higher taxes. Based on the new law creating a Washington County Public Facilities Authority and past deals by the Washington County Development Authority, funding for infrastructure to support the plant may be through a “backdoor general obligation bond.” The County may be asked to directly back bonds for plant construction.

The Fall-line Alliance for a Clean Environment (FACE) and the Georgians for Smart Energy (GSE) Coalition expressed appreciation for the Ochs’ independent analysis. “Taxpayers owe a debt of gratitude to the Ochs Center for this analysis because it shows just how flawed the conclusions of the Chamber study are,” said Katherine Cummings, chair of FACE. “The people of Washington County have been misled. We will not get an immediate tax break. The county won’t get most of the jobs, and we may be left holding the bag for infrastructure costs that will burden our county budget. There are no free lunches and no coal plant goodies. They’re both fantasies.”

Larry Warthen, vice chair of FACE, noted, “The biggest thing we now see is that our elected officials are not being told the whole story. This dirty coal plant will bring pollution, guzzle our water and now we find out that we may have to pay for the roads and sewer and water lines that the plant will require. That is not a good deal for citizens’ pocketbooks.”

The Ochs Center study follows a December 2008 analysis by Synapse Energy Economics which raised key questions about potential costs of Plant Washington to consumers.


David Eichenthal has been the president and CEO of the Ochs Center since January 2005. His areas of expertise include public finance, performance measurement, and local economic development. Eichenthal has two decades of experience in leadership positions in government and the non-profit sector. He is the former Chief Finance Officer of the City of Chattanooga, former Chair of the City's General Pension Plan and held senior positions in New York City government, including serving as an Assistant City Comptroller. He received a B.A. from University of Chicago, and a J.D. from New York University, and may be reached at 423-425-5611, deichenthal@ochscenter.org, www.ochscenter.org
The Fall-line Alliance for a Clean Environment (FACE) is composed of a cross-section of citizens from Washington County area. Katherine Cummings, chair: (478) 232-8822. Larry Warthen, vice chair: (478) 232-7181; www.facenvironment.org
Georgians for Smart Energy (GSE) is a coalition of energy, environmental and public interest organizations from across Georgia. Midge Sweet, director of the GSE coalition, may be reached at (404) 667-4476 or (404) 688-5430; www.georgiansforsmartenergy.org
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