One of the questions we are often asked is the importance of a plant to a local community – specifically the financial benefits. In addition to new jobs, there are other tangible financial benefits. While each project will differ based on location, we can look at the Minnesota project to better understand one of the substantial benefits of these plants – tax revenue. This tax revenue has added importance in these areas, where state support is often going down for rural communities and, as a result, the tax burden is being shifted further to a local, dwindling tax base.

In Benson Minnesota – the Fibrominn project is a very important contributor to the tax base. For 2010, the Fibrominn Biomass Power Plant will pay almost $840,000 in property taxes, which will be distributed primarily to taxing jurisdictions such as the Benson Public School District, the City of Benson, Swift County, and the State of Minnesota. The portion of these property taxes distributed to the City of Benson represent about 28% of Benson’s property tax income. This increase in tax revenue has been particularly important at a time when the State of Minnesota apportionment for Benson has gone down almost 50% in the past 8 years and is in danger of being reduced further under these tough economic conditions. Without the influx of taxes related to Fibrominn, the City likely would have had to raise taxes, increase local fees, reduce services, and lay off City employees.

Not only has there been a significant increase in tax revenue, there has also been a major increase in the total market value of property in Benson. From when the plant began construction in 2005, the total market value of property in Benson has gone up 67%, of which 4/10ths of this increase is associated with Fibrominn. While Fibrominn is a large part of this total market value increase, there also are a number of other important contributors, including significant new home growth in the City, business expansion, and the development of companion facilities.

In addition to the Fibrominn project, one can also not ignore the tax revenue of other businesses that have located next to or have expanded to support the Fibrominn plant. One of these new businesses is North American Fertilizer (NAF), which built a facility next door to process Fibrominn’s nutrient-rich ash by-product into a dry bulk fertilizer. NAF represents another 2.2% of the property tax receipts for the City of Benson. Likewise, a small trucking company located near the plant was bought out and the new owner significantly expanded the facility. To support transportation services provided to Fibrominn, Gibson Transfer Inc. (GTI) ultimately brought their operations to this facility in Benson. The expanded GTI facility, which acts as a hub for upwards of 75 drivers, represents an additional 0.4% of the property tax receipts for the City, with potential increases in the future. What is also interesting about the trucking facility upgrade is that this was an unanticipated benefit to the area, increasing job impacts well above previous expectations.

Representing almost 1/3rd of Benson’s property tax base, Fibrominn and its companion businesses are an important anchor for the long-term viability of Benson, a city on the prairie of western Minnesota that has figured out their own version of prosperity.

Taxes – while most people are not excited to pay them – they are a very important part of the economic security of rural areas. Significant tax revenues from a Fibrowatt facility can be a key part of the local revenue stream, providing the community with an opportunity to lower taxes, decrease local fees, increase services, and providing the foundation for a diversity of other activities that are important to the local community