MARQUETTE - Marquette County equalization officials estimate putting Marquette General Hospital on the tax rolls would boost taxable value by half a billion dollars.
Duke LifePoint Healthcare is working with Marquette General on its proposed acquisition of the hospital, which would change Marquette General from a non-profit facility to a for-profit hospital, subject to local tax levies.
Several steps in the purchases process remain, with approval required by the state attorney general and other governmental entities.
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The tax roll boost estimate was provided this week by Marquette County Deputy Equalization Director Jackie Lykins as she discussed potential taxable value increases for next year with the county board.
Lykins delivered a required equalization report to the panel of the recommended valuations for 22 tax assessing units, including all of Marquette County's 19 townships and the cities of Ishpeming, Negaunee and Marquette.
This year's report was favorable and reflected the recent valuation for the Kennecott Eagle Minerals Co. mine on the Yellow Dog Plains.
"The good news is that we have an increase," Lykins said. "We have about a $162 million increase in taxable value for this year in Marquette County."
Of that amount, $95.7 million was derived from the Kennecott project, without the mine's ore processing center located in Humboldt Township included. The state geologist, in a partial valuation, set the value of the mine at $191 million earlier this year.
"It does not include any increases to the Humboldt Mill because they weren't done," Lykins said. "They've done the environmental, they've done the clean-ups, that have not done any mechanical work on it so there is no increase in that."
But next year is expected to have tax revenue generated at the mill.
"Of course next year we're projecting that and, in some fashion, an increase in the Kennecott (mine) project," Lykins said. "And with fingers crossed, a huge bonus by Marquette General Hospital being put on the tax rolls. We've estimated roughly $500 million. That's huge, for one year."
The taxable value was established as a base in 1994. If there is no transfer of the property to a new owner, the taxable value is capped and can increase annually at the rate of inflation or 5 percent, whichever is higher.
Taxable value cannot be higher that assessed value, which is 50 percent of the estimated property value for 2012. Once a property is transferred, then the assessed value and taxable value become the same and then the process begins again, with the same taxable value cap in place.
"The total value of the county taxable is $2.16 billion and the total assessed value is $2.8 billion," Lykins told the board.
The equalization department said millage reduction fractions for the local units of government, including Marquette County, were also favorable.
"With very few exceptions, one being Humboldt (Township) because they did get some increase, the millage reduction fractions are staying constant," Lykins said. "Which means they do not have to roll their millage back."
Lykins said that was because most of the value was based on new construction and additions.
"If you're just raising your assessed values, your millage gets rolled back," Lykins said. "If most of your value is because is because of additions, based on new constructions and completions of partial construction, your millage reduction fraction stays closer to 1."
Any reduction fractions at 1 or above do not have to roll back.
"Marquette County has a millage reduction fraction of 1.01 which means they do not have to roll back any of their millages for next year," Lykins said. "They will collect the same millages that were collected for all of the county facilities, the general fund, plus the millage based will all remain stable and be able to take full advantage of the increase in taxable value by not having numbers roll back. It's good news. We're hoping to be able to keep that."
In May, when state equalization is completed, the valuations for other counties will be published.
The county board is expected to get supplementary reports from the equalization department, which will show graphs and other comparisons showing growth or drops in various districts, Lykins said.
John Pepin can be reached at 906-228-2500, ext. 206. His email address is jpepin@miningjournal.net.