Refinery's tax objection settled; school district may fight in court

News-DemocratMay 20, 2014 

A major tax objection suit between the Phillips 66 Wood River Refinery and Roxana officials has been settled out of court, but the Roxana School District has indicated it may fight the proposed settlement.

WRB Refining LP had filed a tax objection lawsuit against the Roxana school district, village of Roxana, the Roxana Library District and Roxana Park District.

In its suit, the refinery alleged 28 points relating to its 2011 tax levy, particularly the portion that went to the Roxana School District. The school's levy against the refinery rose from $3.56 million in 2010 to $14.46 million in 2011. Madison County State's Attorney Tom Gibbons' settlement places the refinery's tax bill at $6 million.

Gibbons released a statement noting his team defended the taxing bodies on 20 of the objections, but he had harsh words for the school district, calling for a "full review of the financial management of the district." He said Roxana school officials could not prove that they had actual need of the extra funds, which is required for establishing a levy.

"Unfortunately, the district had attempted to grossly inflate the property tax bill of the refinery to an unsustainable level, without the ability to lawfully justify the need for the increase," Gibbons said. "While each taxpayer must pay their fair share, it is not a proper exercise of taxing authority to single out one taxpayer as a means to overinflate spending."

Roxana Superintendent Debra Kreutztrager could not be reached for comment Tuesday. However, a statement on the Roxana district website called the settlement "devastating to the district."

In the statement, a letter to Roxana parents, Kreutztrager said that the refinery's tax bill was reassessed after its $3.8 billion expansion increased the value of its property from $93.4 million in 2010 to $402 million in 2011 and $429.4 million in 2012.

Due to the refinery's increase in property value, Kreutztrager wrote, the district's tax rate dropped from $4.37 per $100 to $3.89, which saved the owner of a $100,000 house $161 a year in school taxes and $450 in total property taxes.

"It is disappointing that WRB is resisting the obligation to pay its fair share of local property taxes to support our schools," Kreutztrager wrote. "The district has made concessions in the past and has looked forward to the benefits for students due to the refinery expansion. It was anticipated that the district would be in a position to build a much-needed new high school."

The issue is not settled: the 2012 tax levy from the school district is $15.9 percent, which is another 10 percent increase. Gibbons said that bill is still in litigation.

Meanwhile, Kreutztrager wrote that while Gibbons has the right to settle tax objections, the district has the right to petition a judge to overrule it. Gibbons said the settlement has already been approved by a judge, but there is a 30-day window to have the order vacated.

"If the judge approves the state's attorney's settlement with WRB, it will have a devastating impact on the education of all students in the Roxana school district," Kreutztrager wrote. "The board of education is prepared to exhaust all avenues available through the legal system to prevent that from happening."

If sustained, Gibbons said Roxana schools would have to refund $8.6 million to WRB. However, Gibbons said the district can salvage the situation by agreeing to a long-term deal with the refinery -- the latest offer from WRB would not require any refund for 2011 or 2012, he said.

Meanwhile, Gibbons said WRB was willing to forgo its objections against the Roxana library. If not, he said, the library would have had to return its entire levy.

"It was clear that the objection, although well-founded, would have meant the elimination of the library, and nobody wanted to see that happen," Gibbons said. "WRB agreed that it would be a terrible loss for the community, so they conceded their objection to save the library."

Contact reporter Elizabeth Donald at or 618-239-2507.

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