impacts of power plant construction and operation on local units of
government." The study presents historical data for population, school
enrollments, real property values, and annual local budget expenditures and
receipts for eight power plant sites in Wisconsin, These data are then
manipulated through the use of a computer model and standardized regression
analysis techniques to identify preconstruction trends and quantify
posteonstruction effects. These effects are then correlated with different
variables associated with power-plant siting, such as size and tyne of plant
as well as size and location of the host communitv. The report clearly
documents the sizable increases in utility-tax revenues and the concomitant
reduction or complete elimination of local tax collections in nearly every
instance. With large nuclear plants, utility-tax revenue increases in excess
of $3 million were observed during the period immediately following
construction. The widespread occurrence of this fiscal phenomenon, termed a
tax island, was also identified in the Tarr report on local government finance
and organization (Tarr 1969),

The draft PSC report speculates on potential impacts stemming from the
tax-island phenomenon, stating that "the elimination of the general propertv
tax, in turn, will encourage land speculation and can be expected to have
multiplier effects on the demand for land in the area, tending to drive up the
full market value of such property. This [tax advantage], in turn. may be
expected to induce construction of new housine developmerits and/or act as an
incentive for in-migration of other industries attracted to the low tax hase
area" (Wisconsin Public Service Commission 1975a). Althcugh the PSC study did
not include adequate data to document the hypothetical residential and
commercial development that it predicted, it did succeed in detecting the
sudden increase in the rate of appreciation of local prorerty values that
occurred simultaneously with power-plant construction. Figure 2, based on
property-assessment data reported by the PSC for the local area surrounding
the Columbia station (Pacific Township), shows well this increase in value.
Unfortunately, these data aggregate real estate property assessments, which
include both the value of the land and the value of all improvments on the
land. Thus, it is not possible to determine if the changes reflect an
inerease in the market value of the land, an increase in the degree of
improvement (development) associated with the property, or, possibly, some
combination of both. Without a more detailed analysis of the local situation
and dynamics, this relationship between local property values and the siting
of the power plant can only be considered tentative.

In summary, although some attempt has been made to identifv
utility-induced effects on land-use patterns, little attention has been given
to potential effects on landownership patterns, The previous Wisconsin
documents, addressing changes in land-use patterns, are further limited in
that they do not devote adequate attention to very localized impacts, nor do
they assess secondary effects arising from the influx of utility revenues.
However, the influx of utility revenues is clearly established as a
significant effect itself. The potential utility-induced changes in land-use
and landownership patterns, hypothesized by the PSC study, may have some
logical basis in theory, but such changes remain untested. Therefore, the
objective of this study is to examine and test these hypotheses through

~10-


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-31-


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-27-


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-36-


this tax advantage may be offset by its tendency to increase land prices in
the township. The situation may be viewed through the eyes of the potential
home or business owner seeking a location to develop. If other locational
factors are assumed to be more or less equal, he will be drawn to the tax
island. Even though the purchase price of land may be higher, the potential
developer will still purchase and develop there as long as overall savings are
to his advantage. In essence, the market and each individual property owner's
desire to maximize his savings tend to accelerate the development of property
to its highest category of potential use.

For the same reasons we also hypothesized that commercial and industrial
development would increase in Pacific Township. This kind of develovment
should be less evident in the first years of the existence of the tax island
because such factors as markets, raw materials, transport networks, and labor
sources might outweigh the tax advantage for many industries,

Several corollaries to these hypotheses were also explored. Changes in
land use, we expected, might be reflected in changes in landownership.
Specifically, since local capital and expertise might be inadeguate to support
the hypothesized development, we expected increases in absentee and corporate
ownership of land, In addition, we hypothesized that increased residential or
commercial development would be reflected in the reduced mean size of
individual property holdings and in the reduced mean size of individual
property sales, since such development usually involves the subdivision and
sale of increasingly smaller parcels of land.

This study does not attempt to prove that the presence of the Columbia
Generating Station has caused changes in land use in Pacific Township. Many
additional factors could contribute significantly to such change, including
the township's location between Portage and Madison, the presence of large
quantities of marginal agricultural land in the township during a period of
rising land prices, the immigration of new employees for the power plant,
improved services in the township, and the unpredictable decisions of land
developers and land buyers. Given the number of such potential factors, proof
that the tax-island effect caused changes in land use in Pacific Township
probably cannot be achieved and certainly lies outside the scope of this
study. Instead, this report seeks to show that residential development
increased rapidly in Pacific Township between 1971 and 1975 and that the power
plant's tax-island effect may have created preconditions that encouraged this
development.

The preliminary nature of the report is evident in the short duration of
the assessment period and in the use of only one control township. Since time
constraints required that 1975 be the end of the period under study, a limit
that prevents full assessment of the influence of a power plant that was not
begun until 1971, this report is intended instead to provide the basis for a
follow-up study or for more complete assessments of comparable situations. In
addition to the limited study period, more control areas near Pacific Township
and similar examinations of other host townships would be required for a
complete assessment of the tax-island effect. In this study we chose to
examine in detail the property transactions and ownership records in Pacific
Township and in one control township and to use those documents to construct a

-4-


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-44-


TABLE 4, PROPERTY-TRANSFER MATRICES FOR FORT WINNEBAGO TOWNSHIP SHOWING NUMBER OF ACRES TRANFERRED AND
NUMBER OF PROPERTY SALES AMONG FOUR CATEGORIES@0F BUYERS AND SELLERS FOR TRIENNIAL PERIODS
FROM 1962 TO 1973

Years Acreage matrices Sales matrices
Buyer category Buyer category
a a? Q@) @) (4) qa) 2 GG) |)
1962-64 (1)? 529.8 821.5 2.4 166.3 qa) 33 12 2 16
Seller Seller
category (2) 121.0 145.4 0.8 category (2) 3 2 1 1
(3) 0.8 (3) 1
(4) 5.1 (4) 2
Buyer category Buyer category
1965-67 qa) (2) (3) (4) q@) 2) (3) (4)
(2) 454.3 4,8 190.8 202.9 a) 33 4 3 20
Seller Seller
category (2) 53,3 62.7 category (2) 6 8
@) 0.8 @) 1
(4) da 0.8 @ 1 1
Buyer category Buyer category
q@ (2) (3) (4) qa) @ ©
1968-70 (1) 951.3 352.9 230.4 42.0 GQ) 39 9 4 1
Seller Seller
category (2) $7.0 19.8 category (2) 2 2
(3) 7.8 40.0 GB) 3 1
(4) (4)
Buyer category Buyer category
qa) (2) (3) (4) qa) @2) @
1971-73 (1) 3,457.6 441.0 463.4 40,1 qa) 93 5 6 1
Seller Seller
category (2) 144.2 584.3 category (2) 3 5
(3) 3.4 @) 3
(4) (10.8 @ 1

*category (1), local private; category (2), absentee; category (3), corporate; category (4), public.

-50-


development. Specific examples of the employment of zoning were noted by the
PSC study in the communities surrounding the Point Beach and Kewaunee
Generating Stations on Lake Michigan. Local zoning, instituted subsequent to
plant construction, was used in these instances, "to exclude development in
order to retain maximum tax benefits within the local municipality" (Wisconsin
Public Service Commission 1975a).

Although the major thrust of this research has been the identification of
utility-induced development resulting from the test area's comparative tax
advantage, a secondary concern, evident in the landownership analysis, has
been the attempt to identify the agents of anticipated development. Part of
the hypothesis was that local landowners would probably lack the capital and
expertise needed to develop their properties. Thus, we anticipated that
absentee and corporate purchasers with the requisite skills and money would
exploit the situation, inducing land speculation and change in ownership
patterns, However, we found no discernible change in the extent of absentee
ownership and very little increase in corporate ownership attributable to land
speculation in the test area. Except for the acquisitions traced to
Georgetown Homes and the Columbia Corporation, all the land speculation and
development activities suggested by the transfer data were traced to local
individuals, primarily residents of Portage. This circumstance is especially
evident in the transfer of parcels containing recently platted subdivisions,
The hypothesis apparently failed to appreciate the extent of capital and
development expertise available in Portage. Discussion of transfer records
with local officials indicated that property owners desiring to develop their
property frequently enter into various agreements with realty agencies,
whereby the realtor provides the requisite capital and development expertise
in return for a commission on resulting sales, This practice, enabling the
original owner to retain possession until the final sale to a residential
buyer, was evident in the transfer records relating to the sale of residential
parcels in many of the subdivisions identified by the study. This may be a
further explanation of the absence of hypothesized changes in the
landownership categories.

The initial trend toward accelerated residential development is
considered significant, since it portends wide-ranging consequences of
power-plant siting, Although this study has focused on only one specific
instance of power-plant siting, the analysis suggests that similar results
might be obtained for other Wisconsin communities where plants have been or
are being constructed. The PSC report of December 1975 upholds the extension
of these findings. "The major effects of the utility tax rebate has thus been
to create small tax islands whose residents were able to receive a very high
level of public services at little or no direct cost to individual tax payers.
This situation has the potential to create spinoff impacts on property values
and development in the local community. Depending on the type of zoning which
exists in the community, the low tax rate and/or the high level of services
may serve to attract various types of development and drive property values
up" (Wisconsin Public Service Commission 1975b). In discussing the data
collected for the seven plant sites studied, the same PSC report noted, "The
most significant increase in property values was for residential property in
the Township containing the plant site." Five of the host communities surveyed
by the PSC "experienced significant growth in the residential sector." The

-54-


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-42-


Figure 3.

Utility Tax on
Power Plants
100%

Shared Tax
Account
93.3%

Payments to Local
Jurisdictions in
which Plant is
Located

45%

en |

Counties

N
ce“ -,

1 General 1
Fund
I em !

FP fabout 10%) 1
l after 1975

Municipal Gov'ts
26.5-9.6 = 16.9%

18.5%

Utility-tax-distribution system in Wisconsin in 1974.

Alt Local Gov’ts
48.3%

9.6%

-14-

School Districts excluded after 1975


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-32-


FOREWORD

As part of its role in guiding efforts to improve the environment, one
function of the U.S. Environmental Protection Agency (EPA) is to sponsor
system-wide research projects which encompass multiple facets of environmental
impact. The ramifications of large construction or development projects are
not confined, for example, to chemical or biological effects. The Agency,
therefore, prowotes research that transcends the boundaries of traditional
disciplines, covers a broad range of investigations, and integrates the
findings from these investigations.

One such project, which the EPA is supporting through its Environmental
Research Laboratory in Duluth, Minnesota, is the study "The Impacts of
Coal-Fired Power Plants on the Environment." This interdisciplinary study,
involving investigators and experiments from many academic departments at the
University of Wisconsin, is being carried out by the Environmental Monitoring
and Data Acquisition Group of the Institute for Environmental Studies at the
University of Wisconsin-Madison. Several utilities and state agencies are
cooperating in the study: Wisconsin Power and Light Company, Madison Gas and
Electric Company, Wisconsin Public Service Corporation, Wisconsin Public
Service Commission, and the Wisconsin Department of Natural Resources.

During the next year reports from this study, which was based primarily
at the Columbia Generating Station near Portage, Wisconsin, will be published
as a series within the EPA Ecological Research Series. These reports will
include topies related to chemical constituents, chemical transport
mechanisms, biological effects, social and economic effects, and integration
and synthesis.

One component of the Columbia impact study dealt with the potential
economic effects on the host township of the tax advantages accruing to the
township from direct utility payments. As this report demonstrates,
preliminary results indicate that the elimination of property taxes in the
township is leading to accelerated residential development.

J. David Yount

Acting Director

Environmental Research Laboratory-Duluth
Duluth, Minnesota

iii


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YEAR

Figure 2. Property values in millions of dollars for Pacific Township,
Columbia County, Wisconsin, by categories of land use--1962-74.
Data from Wisconsin Department of Revenue (1975).


This economic analysis is restricted to one specific instance in space
and time. Although Columbia I was not affected by the 1975 amendments to the
Wisconsin utility-tax distribution system, future power plants will be so
affected. Moreover, other host communities, particularly in urban areas, will
experience different economic effects. The simplified technique employed here
for assessing the impact of a power plant on the local public economy does,
however, seem applicable to most situations.

-17-


future plants were permitted to utilize the old disbursement formulas for the
first 4 yr following the initiation of construction to "offset the loss of
local property (during construction) before shared taxes could adequately
compensate" (McMillan 1975). The PSC report also noted that "the primary goal
of the revised distribution formula (1971 statutes) was to reduce the size and
number of these 'tax islands', which would inevitably develop around any
sizable power-generating facility." However, that same report pointed out in
another section that "although the shared tax distribution was changed in 1971
to reduce the 'tax island' effects created by the inflow of such sizable sums,
the size, and hence value, of electrical generating facilities has been
increasing at a rapid rate in recent years, resulting in the sums of two or
even three million dollars being returned annually to the host communities of
the newer power facilities." The 1971 statutes did reduce the relative rates
by which utility revenue payments were computed. but, since the new statutes
failed to establish any absolute maximum limits on these payments, the rapidly
escalating size and value of new plants, such as Columbia I and II, were
sufficient to negate any reduction of the large payments previously
identified. The utility-tax-distribution system, as it existed in 1974, is
represented in Figure 3, The schema depicts the system in general, but not
necessarily its actual application to any specific plant.

In 1975 the Wisconsin legislature acted to rectify the problem of
excessive payments. These changes again reduced the rates by which utility
revenue payments were computed and provided absolute maximum limits for all
future plants. The legislation, however, contained several escape clauses
that might permit local community payments to exceed these limits (Alden
Hayes, personal communication). The law, like previous laws, vermitted
communities receiving payments based on previously existing plants to make the
transition to the new system very gradually. The new payment limits were
still liberal and might permit annual payments of $1 million to local
municipalities hosting several utility plants.

A recent PSC report indicates that the primary function of the special
utility payment to host municipalities is to provide just compensation for the
reduction in local revenues resulting from the removal of utility property
from the local tax base (Wisconsin Public Service Commission 1975b), The
report also identifies secondary bases for compensation arising out of
increased costs for social services and the loss of potential local revenues
that might have been generated through alternate industrial development. The
initial loss of revenues, resulting from conversion of the property to utility
ownership, is fairly easy to calculate, but the secondary claims for
compensation are more difficult to quantify. Changes in the demand for local
social services are dependent on numerous variables relating to the plant and
the local community. Claims to compensation for revenues that might be
realized from alternate development must make very speculative assumptions
about the nature and probability of such alternate development. The PSC
report also acknowledges the recent addition of another basis for
compensation: the burden of increased environmental degradation borne by the
host community. This claim is perhaps the most difficult of all to quantify
since the calculations require not only an accurate assessment of
environmental impact, but also a clear delineation between the site-specific
local effects and the wider ranging effects borne by the general public.

-13-


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- 26-


SECTION 3
CREATION OF A TAX ISLAND IN PACIFIC TOWNSHIP
PREVIOUS WISCONSIN STUDIES OF UTILITY-TAX DISTRIBUTIONS

Changes in land-use and landownership patterns are usually addressed under
the heading of "socio-economic impacts" in the environmental impact reports
prepared for power plants. This format was used in the preparation of impact
reports for Columbia Generating Stations I and II by the utility companies,
the Wisconsin Department of Natural Resources (DNR), and the Wisconsin Public
Service Commission (PSC). The technique used by all three agencies was to
split the analysis temporarily into effects of actual construction activities
and effects of postconstruction operations. Thus primary concern during the
construction phase was focused on the influx of labor, capital, construction
equipment, and related resources that might have an effect on the local
socio-economic system. Potential effects examined for the postconstruction
phase were generally restricted to increased demands for social services that
might be anticipated from the actual facility and the operational labor force.

The draft environmental impact statement for the Columbia I unit prepared
by the Wisconsin Department of Natural Resources (1973). concludes that "the
probable impact of the Columbia Project on land-use patterns is not known at
this time. The present trend in land-use in the vicinity of the project site
appears to be toward commercial industrial development, although agriculture
is still of primary importance." The report speculates on various effects on
land-use patterns arising from the "possibility of damage to crops due to air
pollution" and the "potential decline of residential property values with an
accompanying increase in industrial property values." The report also
acknowledges that "changes in tax structure will have an effect on the
development patterns in this area," but declines any futher speculation on
this aspect in deference to a planned study by the University of Wisconsin,
This vague analysis is characteristic of early environmental impact
statements, indicating the paucity of data on which to base credible
predictions.

The impact study 2 yr later by Westwood Research Incorporated (1974),
reflects a significantly improved and expanded methodology, vartially
facilitated by the unique wealth of pertinent data collected during
construction of Columbia I. Armed with statistics for purchasing, employment,
payrolls, housing demand, transportation, and other pertinent aspects, the
authors of this study could make fairly reliable predictions regarding the
short-term construction-related effects of Columbia II. This very detailed
report is one of the most comprehensive of its kind. The Westwood report
concludes that the "construction of Columbia Generating Station, Unit No. 2,
will not cause any significant adverse changes in local population patterns or

~8-


intermediate periods, it regained its earliest level by the 1971-73 period at
the close of the survey,

Like the property-holding data (Figure 25), the property sales data do
not include the effects of the most recent residential subdivisions in
Pacific, The survey of property sales included accurate data only up to
31 April 1974, by which time only about 25 of the newly created 110
residential lots had been sold. The imminent sale of the remainder of these
lots will undoubtedly reduce the mean size of individual sales still further
in the near future. Final documentation of this occurrence must await further
research. The existence of these limitations or problems again serves to
underscore the preliminary nature of this assessment and the need to continue
data collection,

~52-


TABLES

Number Page

1

2

3

Number of Acres in Various Land-Use Categories for Five
Townships in Columbia County, Wisconsin--1970 .......... 3
Actual and Estimated Tax Revenues and Town Investment Fund for
Pacifie Township, Columbia County, Wisconsin--1971-1980 ..... 16

Property-Transfer Matrices for Pacific Township Showing Number of
Acres Transferred and Number of Property Sales Among Four
Categories of Buyers and Sellers for Triennial Periods
from 1962 to 1973 2 6 we eee ee ee eee ee eee

Property-Transfer Matrices for Fort Winnebago Township Showing
Number of Acres Transferred and Number of Property Sales Among
Four Categories of Buyers and Sellers for Triennial Periods
from 1962 to 1973, 2 ew eee ee ee ee eee 5D

viii


SECTION 5

PRESENTATION AND ANALYSIS OF DATA

LAND-USE PATTERNS

Little change in the various land-use categories can be detected in the
maps for Pacific Township for 1962, 1968, and 1970 (Figure 4, Figure 5, and
Figure 6). The residential category increased approximately 20 acres during
the 1962-68 period. The rate of residential development increased only
slightly during the 1968-70 period, and much of that increase was due to the
labor force engaged in construction of the generating station. Prior to 1970
the manufacturing and extraction category and the commercial category remained
almost stable, except for the 1965 addition of the commercially operated Lake
George Recreation Area.

The 1975 map (Figure 7), representing postconstruction land-use patterns,
reflects significant changes in the various categories and in the historical
rates of change. In the residential category three platted subdivisions in
sections 14, 15, and 22 and two smaller unplatted additions in sections 12 and
13 composed most of the growth. We estimated the total area converted to
residential use during the 1970-75 period as 158 acres. Such residential
growth is significant when compared to the total of 60 acres of residential
property added during the 1962-70 period, In fact, the total acreage of
residential property nearly doubled between 1970 and 1975.

Aside from the addition of the power plant itself, the category of
manufacturing and extraction did not change during the postconstruction
period. Several small additions to the commercial category can be detected on
the 1975 map. These additions, lying primarily along Highway 16, are
warehouses and storage yards, Their inclusion in the commercial category is
largely offset by the elimination of the large junk yard which was previously
located along Highway 51 in section 27, and which was moved out of the area in
1971 when the property was acquired for construction of the generating
station, Thus, the total area in the commercial category did not change
significantly.

The sequential land-use maps for Fort Winnebago Township in the
preconstruction period (1962, 1968, and 1970; Figure 8, Figure 9, and Figure
10) reveal a gradual increase in property categorized as residential. The
change is most evident in the expansion of the Redbird Estates Subdivision in
section 34 and in the growth of a second home development in section 16. The
successive maps also indicate the scattered addition of isolated residential
lots. The rate of increase in residential acreage between 1962 and 1970 was
at 5 acres per year for Fort Winnebago, whereas for the same years in Pacific

~23-


Wisconsin Public Service Commission. 1975b. Local economic impacts of power
plant siting in Wisconsin. Bureau of Environmental and Energy Systems,

Madison, Wis. Various pagings.

-59-


and to file the same applications as are required by the zoning ordinance.
Finally, the Columbia County zoning ordinance is not comprehensive by any
standards. If sufficient economic pressures are brought to bear, rezoning
petitions will be approved. The effect of the county zoning ordinance has
been to control development, not to prevent or inhibit it (Deknatel and Harris
1970). Thus, although creation of a zoning island may affect land-use
patterns in general, the specific occurrence of this phenomenon in Pacific has
had little or no such effect.

LAND-USE MAPPING

One problem in any land-use mapping project is the selection of
eategories. Selection is determined by the nature of the area to be mapped
and the purpose for which the maps are to be used, The categories of
interest, identified in the hypotheses of this study, included residential,
commercial, and industrial. Since no heavy industry was located within either
of the areas, and since sand and gravel pits are plentiful throughout the
area, we decided to substitute manufacturing and extraction for the industrial
eategory. Additional categories of agriculture, swamp-waste and wild pasture,
forests and woodlands, and lakes and rivers were added to make the maps more
comprehensive. These categories were compatible with the land-use categories
utilized by the Columbia County Planning Department and are essentially the
same as those established by the Wisconsin Department of Revenue for the
purposes of property-tax assessment. We initially planned to use
tax-assessment records to compile a portion of the land-use records, and,
although these records could not be obtained, the land-use categories were
retained in the hope that future researchers might be able to exploit this
technique.

Historical land-use mapping for 1962 and 1968 was accomplished from
black-and-white aerial photographs provided by the Columbia County Office of
the Agricultural Stabilization and Conservation Service, The aerial photos
have been enlarged to a scale of 1:8,000, and section lines and identification
have been superimposed to facilitate use. Each enlarged photograph contains
four standard survey sections. The 1970 land-use data were obtained from the
Columbia County Planning Department, which had compiled township land-use maps
from a 1970 field survey. These maps, of both the test and the control
townships, were copied to provide the historical record for 1970. Final
land-use coverage was obtained by field survey during July 1975. Thus, the
historical record of land-use is based on four discrete sampling periods:
1962, 1968, 1970, and 1975.

The large scale (1:24,000) blank zoning maps, which were used as base
maps, were provided by the Columbia County Planning Department and were
originally compiled by the Wisconsin Bureau of Local and Regional Planning,
Department of Local Affairs and Development. Transfer of data was frequently
facilitated by the regular patterns of the original land survey. A modified
zoom-transfer scope was used to reduce scale and to project irregular
photographic patterns. Consistency of delineation in arbitrary vegetation
categories was maintained by overlaying successive maps on a light table
during photographic analysis, so that only intentional temporal differences
were reflected in the resultant patterns. Even with this procedure, however,

-20-


Foreword
Abstract
Figures

Tables .

1.

3.

6.

Bibliogr:

CONTENTS

Ce
Ce

Ce

Introduction. ... we ee
The power plant and study area
Hypotheses . 2.4 2 1 6 ses

Conclusions and Recommendations .

.

Creation of a Tax Island in Pacific Township
Previous Wisconsin studies of utility-tax distributions

History of utility-tax distribution in Wisconsin

Impact of utility payments on the budget

of Pacific Township ....
Research Methods . 2. 6 6 ss es we
Temporal limits ..... 26
Selection of a control area .
Land-use mapping «4 ss 4656
Landownership mapping ....

.

.

.

Collection of ownership and sales data

Presentation and Analysis of Data
Land-use patterns ......
Landownership patterns .. 44

Changes in mean size of individual holdings.

Property transfer matrices ..

aaa

Changes in mean size of property sales

Discussion... 6 ee eee eee

APAY se we ew ee ee ee ee

. iii
» iv
eo ovi
evili
4 1
. 1
. 1
» 6
» 8
» 8
» 2
» 5
~ 18
- 18
» 19
+ 20
» 21
+ 21
- 23
» 23
» 28
+ 38
~ 48
- 48
« 53
- 56


ABSTRACT

As a result of the construction of the Columbia Generating Station
(Columbia I) near Portage, Wisconsin, the three sponsoring utility companies
began making compensation payments in 1971 to the host township, Pacific
Township, Columbia County. As specified by Wisconsin statutes, these payments
are designed to compensate the township for property tax losses caused by the
plant, for possible increased costs for social services, and for possible
increased environmental degradation. Despite recent amendments to the
statutes, these payments have created a "tax island" in Pacific Township; that
is, the township no longer needs to levy any local property tax.

Property records and land-use maps indicate that by 1975 residential
development had accelerated in the township, although no significant increase
in commercial or industrial development was evident. The sharp upturn in the
rate of residential growth contrasted with a continuous and moderate rate of
growth in the adjacent township of Fort Winnebago. The change in Pacific
Township was accompanied by decreases in the average size of individual
property holdings and in the average size of individual property sales. No
significant change was found in the proportion of absentee or corporate owners
in the township.

These findings must be considered preliminary, since they are based only
on the 4 yr following the beginning of construction of the station, and since
other factors may have contributed to the observed changes,

The U.S. Environmental Protection Agency contributed directly to this
study by providing funds for graphics and report production. The Agency
contributed indirectly by supporting in part the project "The Impacts of
Coal-Fired Power Plants on the Environment." Additional funds for the impact
study came from the University of Wisconsin-Madison, Wisconsin Power and Light
Company, Madison Gas and Electric Company, Wisconsin Public Service
Corporation, and Wisconsin Public Service Commission. This report is
submitted toward fulfillment of Grant No. R803971 by the Environmental
Monitoring and Data Acquisition Group, Institute for Environmental Studies,
University of Wisconsin-Madison, under the partial sponsorship of the U.S.
Environmental Protection Agency. The report covers the period November 1969
to April 1975, and work was completed as of February 1979.

iv


local demand for housing and community services, No significant adverse
ehanges in land-use patterns in the area will result from the construction
needs for local building materials" and "no new land will be required and
other land-uses will not be affected."

Although the analysis conducted by the Westwood study appears quite
valid, the contextual framework of the research has deficiencies. The
secondary effects arising from the influx of large utility-tax revenues, paid
through the Wisconsin shared revenue account, are generally ignored. Although
considerable space is devoted to estimating future local tax revenues, no
attempt is made to assess the potential impact of these payments on the
existing land-use patterns. In addition, the Westwood study attempts to focus
its analysis on various impact areas: the immediate area, defined as the
entire county; the intermediate area, defined as the seven contiguous
counties; and the entire service area of the three sponsoring utilities, which
includes more than half the State, Thus, highly localized effects, such as
the sizable utility revenues paid to the host township, may be obscured when
averaged over the entire county or a larger area. Likewise, secondary effects
on land-use patterns may be considered insignificant when related to the
entire county, but may be highly significant at the local township level.

The preliminary environmental report for Columbia II, prepared and
circulated by the Wisconsin Public Service Commission (1974a), reflects heavv
dependence on the Westwood report and lists socio-economic effects as
"non-significant incremental impacts," concluding that "no significant changes
in local population patterns from the immigration of the relatively small
number of personnel is expected." Because of comments received during the
review of the preliminary environmental report, however, the PSC included the
following assessment in its final impact statement later the same year: "The
Town of Pacific [Pacific Township] is a major recipient of the utility tax.
This tax situation will, in all likelihood, increase local development"
(Wisconsin Public Service Commission 1974b).

The Westwood report is also cited repeatedly in an excellent work bv
McMillan (1975) on the effects of power plants on communities. He states:
"The major economic impact of a power development upon the municipality in
which it is located is through the substantial tax benefits provided. In
rural communities studied, these revenues meant substantial reduction and even
elimination of local taxes supporting the municipal government." The report
provides a detailed explanation and model for computing immediate and future
revenue gains derived from the utility. The author takes into account the
potential offsetting liabilities and costs that can accompany power-plant
siting and clearly demonstrates that "utility taxes have amounted to tax
bonanzas in some local governments" (McMillan 1975).

In the study entitled Impacts of Power Plant Siting, conducted by the
Wisconsin Public Service Commission (1975a) for the Coastal Zone Management
Development Program, the most significant economic impact is considered to be
the "rapidly increasing size of incoming revenues of the utility tax payment
portion of the shared tax formula." This PSC study, conducted concurrently
with our research, represents "an attempt to develop a data base and
indicators to allow the prediction of the probable economic and socio-economic

-9-


15

16

17

18

19

20

21

22

23

24

25

26

Landownership map for Pacific Township, Columbia County,
Wisconsin--1968 2 6 1 1 we ee te ee

Landownership map for Pacific Township, Columbia County,
Wisconsin--1971 2. 6 2 1 eee ee ee ee ee ee wee ee

Landownership map for Pacific Township, Columbia County
Wisconsin--1974 2 6 6 wee ee et we ee ee

Percentage of land owned by four categories of owners in Pacific
Township, Columbia County, Wisconsin--1962-74 .......0068-

Landownership map for Fort Winnebago Township, Columbia County,
Wisconsin~-1962 . 6. wc ee ee ee ee ee

Landownership map for Fort Winnebago Township, Columbia County,
Wisconsin--1965 2 6 6 ww ee ee ee ee te

Landownership map for Fort Winnebago Township, Columbia County,
Wisconsin--1968 . 2. 6 6 ee ee te ee te ee te tt ee

Landownership map for Fort Winnebago Township, Columbia County,
Wisconsin--1971 2. 6 1 ee we ee ee ee ee ee

Landownership map for Fort Winnebago Township, Columbia County,
Wisconsin--1974  . ww ee ee ee

Percentage of land owned by four categories of owners in Fort
Winnebago Township, Columbia County, Wisconsin--1962-74 .....

Mean size of property holdings in Pacific and Fort Winnebago
Townships, Columbia County, Wisconsin--1962-74 .........-

Mean size of property sales in Pacific and Fort Winnebago Townships,

Columbia County, Wisconsin, for triennial periods from 1962
to 1973 6 ee ee eee ee wee ee

vii

36

37

39

40

4y

42

43

ay

45

46

NT

51


An additional aspect to consider is the effect that annual utility
payments may have on other local revenues provided by the State.
Incorporation of the utility taxes into the shared revenue account in 1971 has
made the special utility payment part of an interlocking system of revenue
disbursements managed by the Wisconsin Departments of Revenue and
Administration, Distribution of the shared revenue account funds to counties
and municipalities is made through three annual pavments: the per capita
payment, the special utility payment, and the property tax burden payment.
The per capita payment is based solely on population and is not affected by
the special utility payment. The property tax burden payment, however, is
computed according to a complex formula which takes into account both
population and the local tax burden, as measured partially by a municipality's
previous tax rates. Thus, a municipality that maintains a relatively low
local tax rate can expect eventual reduction or possible elimination of this
payment. This reduction may be of significance in instances involving
utility-induced tax islands (Wisconsin State Statutes, Chapter 79, 1974).

The Property Tax Credit Program, which provides for payments to each
municipality in the form of tax credits, is included in the same statute.
Payments are based on a formula that takes into account the full value of all
property within the municipality and its previous year's full value tax rate.
The system, designed to equalize property tax burdens throughout the State,
will generally operate to withhold credits from those communities with already
low tax rates, while providing some assistance to areas where high tax rates
have persisted. Communities that have eliminated their local tax collection
would obviously forfeit any tax credits,

This abbreviated history of utility-tax disbursements must also include
the issue of sharing municipal utility revenues with local school districts.
A law enacted in 1925 directed all townships and villages to distribute
one-half of their utility-tax receipts to local school districts within their
own boundaries, The sharine-distribution rate was changed in 1971 to a
4-to-11 ratio of the total utility-tax receipts. However, an exception in the
original law stipulated that municipalities were not required to share with
school districts lying within counties whose populations exceed 50,000 or with
school districts wholly encompassing a city. These provisions have frequently
permitted municipalities to avoid sharing with the school districts. Such has
been the case in the Pacific Township, which lies largely within the same
school district as the city of Portage. The 1975 amendments to Chanter 79 of
the Wisconsin State Statutes eliminate all requirements for the sharing of
utility revenues with school districts, obviating any necessity for future
consideration of this effect.

IMPACT OF UTILITY PAYMENTS ON THE BUDGET OF PACIFIC TOWNSHIP

With the previous discussion in mind, the impact of the Columbia
Generating Station on the public economy and fiscal status of Pacific Township
ean be assessed. Utility-tax revenues paid to Pacific Township grew rapidlv
after the initiation of construction of the generating station in 1971 (Table
2). The town excess funds also have grown rapidly and have been invested in
certified deposits earning between 5.5% and 6.5% annual interest. All data
prior to 1975 were extracted from the Official Financial Reports of Pacific

-15-


United States Er
Environmental Protection Laboratory Januar y 1980
Agency Duluth MN 55804

Research and Development

SEPA Local Land-Use and
Landownership
Patterns Near a Power
Plant

Wisconsin Power Plant
Impact Study

Uno. = 24 STENCY

SW



The 1974 map (Figure 17) depicts a further net increase of about 700
acres in the corporate category, Of this, WPL acquired about half (380
acres). The remaining purchases were made by small corporations, such as
Georgetown Homes, Inc., and Ryan of Wisconsin, a subcontractor of WPL. Their
acquisitions in sections 25 and 27 were 155 ac and 66 acres, respectively.

The most significant change in the percentages of each category of
ownership in Pacific Township from 1962 to 1974 is the pronounced decline in
local private ownership between 1968 and 1971 (Figure 18). This decline,
resulting from sizable increases in both public and corporate ownership,
cannot be directly attributed to effects of the power plant.

Fort Winnebago Township

The historical landownership maps of Fort Winnebago Township (Figure 19,
Figure 20, Figure 21, Figure 22, and Figure 23) contrast with those presented
for Pacific, The 1962 map shows local private ownership dominant, but also
depicts a sizable block (1,750 acres) of public area. The initial scatter of
absentee- and corporate-owned parcels seems almost insignificant. The major
change reflected in the 1965 map is the increase in absentee holdings in the
southern portion of the town, which resulted from the acquisition of about 600
acres of wetland for the purpose of muck farming. The succeeding maps for
1968 and 1971 reflect little change in the relative proportions of the various
ownership categories. The gradual increase in the corporate category along
the southern border of the township is caused by acquisitions totaling nearly
450 acres by the Gunderson Construction Company and the Columbia Corporation,
The continuation of this gradual corporate expansion is indicated in the 1974
map, most notably in the acquisition of 200 acres by Portage Gardens, Inc., an
agribusiness enterprise located immediately north of Portage. Except for the
1962-65 period, no noticeable change can be detected in the relative
proportions of absentee-owned property. The percentages of each ownership
category by year for Fort Winnebago Township are shown in Figure 24.

CHANGES IN MEAN SIZE OF INDIVIDUAL HOLDINGS

As an extension of the analysis of change in landownership patterns, the
mean size of individual property holdings for each township was computed for
each of the study years, The computation was made by dividing the total
amount of property (minus public property) by the total number of individual
owners. The mean size of holdings in the test township of Pacific was
significantly reduced from 57 to 31 acres, or a 46% decrease (Figure 25). The
reduction in mean size of holdings in Fort Winnebago was also significant,
from 83 to 63 acres, or a 24% decrease (Figure 25). The amounts of absolute
reduction in each of the two areas are comparable. These reductions in the
mean size of holdings were generally constant throughout the analysis period,
which suggests that the construction of the power plant had little or no
relationship to the changes that occurred.

The data may be somewhat misleading without additional discussion.
First, the mean size of holdings in Pacific is inflated by the large blocks
owned by WPL and the Martin Marietta Company. In 1975 they owned more than
2,800 acres, or about 21.5% of the entire township. The expansion of their

-38-


[_

i |

LEWISTON | FORT MARCELLON
i RANDOLPH
|

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{ |
WINNEBAGO | scott |
| |
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7
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COLUMBIA
COUNTY

Figure 1. Map of Columbia County showing location of townships and Columbia
Generating Station (%#*).

-2-


SECTION 1

INTRODUCTION

THE POWER PLANT AND STUDY AREA

The Columbia Generating Station consists of two 527-MW coal-fired
electrical generating units constructed near Portage, Wis., between 1971 and
1978, The physical site, on the flood plain of the Wisconsin River, consists
of approximately 2,710 acres in Pacific and Dekorra Townships, Columbia
County, Wis. (Figure 1). Features of the site include a cooling lake of 488
acres, a coal storage and main generating station of 271 acres, and an ashpit
of 78 acres. The total area directly affected by construction has been
estimated at 1,003 acres.

Except for a small portion of the cooling lake, the generating station
lies entirely within Pacific Township. This township and Fort Winnebago
Township, the control township for this study, are predominantly agricultural.
Both townships have sizable and fairly comparable areas of woodland, wetland,
and parks, primarily along the Wisconsin and Fox Rivers. Pacific Township has
had a greater proportion of commercial development than Fort Winnebago
Township; most of this development is located along U.S. Highways 51 and 16
south of Portage. Land-use acreages for these two townships and three other
townships in Columbia County were determined in 1970 by the Columbia County
Planning Department (Table 1).

HYPOTHESES

Under a complex set of Wiconsin statutes (see section 3), the host
township for a generating station receives substantial tax distributions from
the participating utilities. As a result of these distributions Pacific
Township has become a "tax island" and needs to levy no property taxes.
Although the effects of utility-tax disbursements on a region or entire state
have been investigated, little attention has been given to the effect at the
township level. The purpose of this study is to compare Pacific and Fort
Winnebago Townships from 1962 to 1975 to determine if significant changes in
land-use and landownership patterns have occurred in Pacific Township since
1971.

Specifically, we hypothesized that residential development would increase
more rapidly in Pacific Township than in Fort Winnebago Township. Although
many factors might contribute to such growth, the existence of a tax island
tends to increase development because property taxes are assessed on the value
of the land plus the value of improvements, and therefore the greatest
advantage would accrue to owners of developed property. To a certain extent

-1-


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=

1962-64 1965-67 1968-70 1971-73
Three-Year Period

Figure 26. Mean size of property sales in Pacific and Fort Winnebago townships,
Columbia County, Wisconsin, for triennial periods from 1962 to 1973

~51-


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-34


excellent cross-check on changes noted on the landownership maps from year to
year.

-22-


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39-


delineation between the category of swamp-waste and wild pasture and the
eategory of forests and woodlands became somewhat arbitrary. Agricultural
lands (including cropped land and cultivated pasture) were readily delineated
in many cases because most of the photographs had been marked and indexed to
show the actual crop identity and field ownership. The category forests and
woodlands included tree farms and nurseries, in addition to wild forest land,
Farmsteads were included in the agricultural category. Mapping and
computation of residential property was facilitated by reference to master
plat maps and subdivision plats, maintained in the Columbia County Tax Listing
Office. Entire residential subdivisions and additions were entered on the
maps as of the date of official platting, regardless of the stage of
development at that time. Manufacturing and extraction included the sand and
gravel pits, which constitute a major portion of that category.

LANDOWNERSHIP MAPPING

Selection of categories for landownership mapping was based primarily on
the hypotheses of the study, which predicted changes in the relative
proportions of property in the categories of local ownership, absentee
ownership, and corporate ownership. A fourth category of public ownership was
added to account for additional areas that were detected during data
collection,

Compilation of historical landownership maps began with the extraction of
ownership data from annual township tax rolls, maintained by the Columbia
County Treasurer's Office. Data were extracted for 1962, 1965, 1968, 1971,
and 1974 since those years coincided with the land-use maps and with the
tri-annual plat map series published by the Rockford Map Publishing Company
(1961,1965, 1968, 1972, 1974). Ownership lists, reflecting names, parcel
numbers, acreage, and the category of ownership, were compiled for both
townships. The local-private category was assigned to all owners whose
addresses lay within the study area or any of the surrounding contiguous
townships or other municipalities. Private owners outside that area were
elassified as absentee. Acreage figures, which were occasionally missing from
the tax rolls, were extracted later from the master plat maps in the Tax
Listing Office. The ownership mapping was accomplished by the use of
ownership lists in conjunction with the master plat maps, which describe and
delineate individual numbered parcels, The same blank zoning maps that were
used to compile the land-use maps were used as the base maps for the
landownership data.

COLLECTION OF OWNERSHIP AND SALES DATA

The compilation of property sales data was facilitated by the existence
of a transfer extract, maintained in the Tax Listing Office for each township
in the county. This extract, used by the Tax Listing Office to maintain
accurate identification of property owners, is derived from the official
records maintained in the Office of the County Registrar of Deeds. Entries
for date, seller, buyer, parcel numbers, and acreage were extracted. Then, by
reference to the previously compiled ownership lists, the seller and buyer
were further identified by ownership category. This information on the nature
of the transfer was recorded along with the sale entry, These data provide an

-21-


Tarr, C.W. 1969. The report of the task force on local government finance
and organization in Wisconsin. Office of the Governor of Wisconsin,
Madison, Wis. Various pagings,

Walrath, A.J. 1959. Impacts of changes in land use: A study of an
urban-rural area of southeastern Wisconsin. Agric. Res, Serv., ARS43-95,
U.S. Dep. Agriculture, Washington, D.C. 55 p,

Westwood Research Incorporated. 1974. Evaluation of potential socio-economic
impacts of the construction and operation of Columbia Generating Station
No. II. Appendix B of Environmental impact report, Columbia Generating
Station, Unit No. II, Columbia County, Wisconsin. Wisconsin Power and
Light Company, Madison Gas and Electric Company, Wisconsin Public Service
Corporation, Madison, Wis. Various pagings.

Willard, D.E. 1973, Preliminary documentation of environmental change
related to the Columbia electric power generating site. Institute for

Environmental Studies, Working Paper 11, Univ. Wisconsin-Madison,
Madison, Wis. 22 p.

Wisconsin Agricultural Experiment Station. 1943. Land tenure in process: A
study of farm ownership and tenancy in a Lafayette County (Wis.)
township. Wisconsin Agr. Exp, Sta, Res. Bull. 146, 48 p.

Wisconsin Department of Natural Resources. 1973. Draft environmental impact
statement for Columbia Generating Station of the Wisconsin Power and
Light Company. Madison, Wis. Various pagings.

Wisconsin Department of Natural Resources. 1974. Impact of state land
ownership on local economy in Wisconsin. Tech, Bull. 80. 96 p.

Wisconsin Department of Revenue. 1975. Statistical report of property
values, Columbia County, Wisconsin. Madison, Wis. Various pagings,

Wisconsin Legislative Reference Bureau. 1973. History of the provisions of
section 76.28 of the Wisconsin statutes, relatina to the apportionment of
public utility taxes, Madison, Wis. 8 p.

Wisconsin Public Service Commission. 1974a. Preliminary environmental report
on the proposed unit no. II at the Columbia Generating Station. Bureau
of Environmental and Energy Systems, Madison, Wis. Various pagings.

Wisconsin Public Service Commission, 1974 b, Final environmental impact
statement on the proposed unit no. II at the Columbia Generating Station.
Bureau of Environmental and Energy Systems, Madison, Wis. Various
pagings.

Wisconsin Publie Service Commission. 1975a.. Impacts of power plant sitine.

Bureau of Environmental and Energy Systems, Madison, Wis, Various
pagings.

-58-


FIGURES

Number Page
1 Map of Columbia County showing location of townships
and Columbia Generating Station ..........0.6.26.202800- 2

2 Property values in millions of dollars for Pacific Township,
Columbia County, Wisconsin, by categories of land use

1962-TH we ee ee
3 Utility-tax-distribution system in Wisconsin in 1974... oe .
4 Land-use map for Pacific Township, Columbia County,

Wisconsin--1962 2... ee ee ee we 24
5  Land-use map for Pacific Township, Columbia County,

Wisconsin--1968 2. 1. ee ee ee ee 85

6  Land-use map for Pacific Township, Columbia County,

Wisconsin=-1970 2 6. eee ee ee ee ee ee eee ee 26

7  Land-use map for Pacific Township, Columbia County,
Wisconsin--1975 6 6 6 we ee ee ee ee ee OT

8  Land-use map for Fort Winnebago Township, Columbia County,
Wisconsin--1962 2. 6 6 6 ee ee ee ee 29

9 Land-use map for Fort Winnebago Township, Columbia County,
Wisconsin--1968 2 6. . we ee ee ee ee ee 80

10 Land-use map for Fort Winnebago Township, Columbia County,
Wisconsin--1970 2 6 1 ew ee ee ee ee ee eee 8

11. Land-use map for Fort Winnebago Township, Columbia County,
Wisconsin--1975 6 6. wee ee ee ee ee ew 82

12 Residential land use in Pacific and Fort Winnebago townships,
Columbia County, Wisconsin--1962-1974 . 2... ...-2..2.-2.4. 33

13 Landownership map for Pacific Township, Columbia County,
Wisconsin--1962 2 2 1. ee ee ee ee ee ee BH

14 Landownership map for Pacific Township, Columbia County,
Wisconsin--1965 6. 6 6 ee ee ee ee 5

vi


historical and comparative analyses of the land-use and landownership patterns
of a specific host community, Pacific Township, Columbia County, Wisconsin.

HISTORY OF UTILITY-TAX DISTRIBUTION IN WISCONSIN

The Wisconsin Legislative Reference Bureau (1973) has compiled a detailed
history of Wisconsin statutes governing the collection and disbursement of
public utility taxes, Local taxation of public utility property was abolished
in 1854 when the State instituted a policy of taxing all utilities on the
basis of their gross earnings. In 1908 the State expanded the ad valorem
property tax system to include all public utilities. In essence, the State
levied on all utilities a tax based on the value of the individual utility's
property within the State and the average net mill rate computed for all the
tax districts within the State. Under this system the State retained 15% of
the utility tax and disbursed the remainder to local units of government in
proportion to the individual utility sales transacted in each municipality.
Thus, urban areas, which consumed much larger amounts of electricity, received
disproportionately large shares of the rebate. The location of the generating
station was not considered. This ineauity was partially alleviated in 1911,
when the State developed a more complex formula for apportioning the rebate.
The new formula took into account the location of the utility's property as
well as the location of its sales. In 1917 the State reduced the total
municipal apportionment to provide 20% of the total utility tax to individual
counties. The county share was allocated in proportion to the amounts
distributed to their respective municipalities. In 1916 the Wisconsin Supreme
Court ruled that the apportionment formula was still inequitable, in that it
gave disproportionate weight to the location of sales and, therefore, to urban
areas. The apportionment formula was changed to comply with the court ruling
and has, henceforth, been based primarily on the actual location of property,
although the location of sales has still been included as a minor criterion.
In 1963 the distribution was fixed at 17% for the State, 19.5% for the
counties, and 63.5% for the municipalities, The actual apportionment formula
remained intact, still based primarily on the location of the utility's
property (Wisconsin Legislative Reference Bureau 1973).

The next major change of the system occurred in 1971, following the
publication of the Tarr report and widespread citizen criticism of the
utility-induced "tax islands," which were well documented in the report.
Although the method by which the State taxed privately owned utilities did not
change, the 1971 statutes reorganized the distribution system completely. All
utility taxes, except 6.7% retained by the State, were now deposited in the
municipal and county shared tax account. A special utilitv tax payment, based
solely on the location and value of each utility's property, was made from
this account prior to any other disbursements of these funds. The computation
of these payments was based on a complex formula that attempted to compensate
each community on the basis of its population, location, and wealth, as well
as on the size and value of the utility property. The general thrust of the
1971 legislation was to substantially reduce the sizable revenues being
realized by small local governments (McMillan 1975). The new laws, however,
applied primarily to new plants and generally permitted communities containing
existing plants, or plants under construction, to make a gradual transition to
the new system and to reduced payments. In addition, host communities of

-12-


TABLE 3. PROPERTY-TRANSFER MATRICES FOR PACIFIC TOWNSHIP SHOWING NUMBER OF ACRES TRANSFERRED AND NUMBER
OF PROPERTY SALES AMONG FOUR CATEGORIES*0F BUYERS AND SELLERS FOR TRIENNIAL PERIODS FROM
1962 TO 1973
Years Acreage matrices Sales matrices
Buyer category Buyer category
a, D (2) (3) (4) qQ) 2) (3) (4)
1962-64 (2)°1,106.7 471.1 339.8 qo 47 9 6
Seller Seller
category (2) 651.1 496.3 category (2) 10 5
(3) 168.4 40.0 (3) 2 2
(4) 10.3 (4) 1
Buyer category Buyer category
a) Q) (3) (4) qQ) (2) G3) 4)
1965-67 (2) 1,073.9 33.2 202.9 631.4 qa) 72 20 4 7
(2) 303.8 17.3 86.1 Q) 7 4
Seller Seller
category (3) 16.0 86.1 category (3) 2 1
(4) 0.7 @ 1
Buyer category Buyer category
qa) @) (3) (4) a) (2) 3) (4)
1968-70 (1) 353.3 468.9 459.8 649.4 qa) 38 18 9 10
Seller Seller
category (2) 0.6 134.9 204.0 23.7 category (2) 1 4 2 2
G) 34.6 24.0 1.0 @) 3 2 1
(4) (4)
Buyer Category Buyer category
qa) (2) (3) (4) Q@) (@) @) (4)
1971-73 (2) $14.2 261.4 439.9 qa) 100 1120
Seller Seller
category (2) 211.3 48.2 category (2) 7 2
(3) 1.3 50.7 @G) 3 5
4) (4)

*category (J), local private; category (2), absentee; category (3), corporate; category (4), public.

-49-


BIBLIOGRAPHY

Alston, F. 1972. Preferential taxation of agricultural and open space lands:
A proposal for Wisconsin, Institute for Environmental Studies, Working
paper 8F, Univ. Wisconsin-Madison, Madison, Wis. 57 p.

Barlowe, R. 1972. Land resource economics: The economics of real property.
and ed, Prentice Hall, Inc., Englewood Cliffs, N.J. 616 p.

Columbia County, Wisconsin, Planning Department, 1970a. A comprehensive
development plan of Columbia County. County Board of Columbia County,
Portage, Wis. 64 p,

Columbia County, Wisconsin, Planning Department, 1970b. Physical features
analysis, Columbia County. Rep. 1. County Board of Columbia County,
Portage, Wis. 55 p.

Columbia County, Wisconsin, Planning Department. 1970c. Existing land use,
Columbia County. Rep. 2, County Board of Columbia County, Portage, Wis.
52 p.

Columbia County, Wisconsin, Planning Department, 1970d. Population analysis,
Columbia County. Rep. 3. County Board of Columbia County, Portage, Wis.
58 p.

Columbia County, Wisconsin, Planning Department. 1970e. Economie analysis,
Columbia County. Rep. 4. County Board of Columbia County, Portage, Wis.
95 p.

Columbia County, Wisconsin, Planning Department. 1970f. Transportation
analysis, Columbia County. Rep. 5. County Board of Columbia County,
Portage, Wis, 81 p.

Columbia County, Wisconsin, Planning Department. 1971. Community facilities
analysis, Columbia County. Rep. 6. County Board of Columbia County,
Portage, Wis. 117 p.

Deknatel, C., and S. Harris. 1970. Zoning to preserve agriculture:
Columbia County. Wisconsin Department of Administration, State Planning
Office, Madison, Wis. 10 p.

Hardin, G. 1972. Living on a lifeboat, p. 375-384. In R.L. Smith [ed.] The
ecology of man: An ecosystems approach. Harper and Row, New York.

56+


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-45-


SECTION 4

RESEARCH METHODS

Two problems emerged at the outset of this investigation: What temporal
bounds should be chosen and what area should be used as a control. The study
of land-use and landownership patterns is particularly complex because these
patterns are constantly changing in response to the vressures of the natural
and human communities that create them and because the extremely diverse
forces that affect the patterns, the variables of the experiment, cannot be
manipulated or controlled.

TEMPORAL LIMITS

To document preconstruction land-use and landownership patterns, 1962 was
selected as the starting point of the analysis period. Selection of this
starting date permitted us to take advantage of existing aerial photography
for 1962 and 1968.

The choice of a starting date for the hypothesized development resulting
from the power plant was more difficult. We chose November 1969, the date of
the public announcement that the plant would be built in Pacific Township.
Some utility-induced land speculation could have occurred before that date,
since the utilities purchased most of the land at the site during the late
1950's and since rumors of impending plant construction had circulated as
early as 1965 (Schmeid 1973). However, in view of the vagaries of power-plant
siting, the tentative nature of the rumors, and the high risks associated with
speculative purchasing, significant speculation or development before 1969 is
unlikely.

The analysis period was extended to July 1975, as far forward as the
practical constraints of the project would permit. Although we hypothesized
that some accelerated development would occur between 1969 and 1975, this
assessment period is admittedly too brief to provide a complete documentation
of the total expected changes. We expected that development would proceed
slowly at first, especially since construction of the plant did not begin
until 1971 and since the township did not receive its first large utility
payment until November 1973. Preliminary visits to the area in the spring of
1975 confirmed the existence of new development and the local perception that
accelerated development was occurring. Since the tax-sheltered status of the
town is now well established, the potential change or rate of change
identified by this study may accelerate. We anticipate, then, that a
follow-up study will be performed to measure changes over a longer period.

-18-


holdings during the analysis period largely offset the reductions in the mean
size of holdings in the remainder of the township. Second, the reduction in
mean size of holdings is primarily attributable in both towns to residential
subdivision and development. The recent trend in farm size throughout the
county has been toward increasing acreage. From 1940 to 1964 average farm
size increased from 150.6 to 186.1 acres (Columbia County, Wisconsin, Planning
Department 1970a), The impact of this change on mean size of holdings is
insignificant, however, compared to that of residential subdivisons, which add
large numbers of small-acreage property owners. Thus, in Fort Winnebago the
major contributing factor to the reduction in the mean size of property
holdings was the addition of the Redbird Estates Subdivison, consisting of 61
half-acre lots which were sold between 1965 and 1974. The recently platted
subdivisons in Pacific add 110 new residential-size lots, However, very few
of these lots are reflected in the data prior to the survey cutoff date, 31
April 1974, Their subsequent inclusion in the data would undoubtedly involve
a marked reduction in the mean size of holdings. Since no corresponding
subdivision plats have been filed for Fort Winnebago, the differences in mean
size of holdings between test and control area should become more pronounced,

PROPERTY-TRANSFER MATRICES

Property-sales data, extracted from the transfer extract, were aggregated
in 3-yr blocks to coincide with the ownership maps and to reduce the annual
variance, The sales data, including both the total number of sales and the
total acreage sold, were organized into matrices identifying the ownership
category of both the buyer and the seller (Table 3, Table 4). The vertical
index identifies the ownership category of the seller, and the horizontal axis
identifies that of the buyer. For example, during the 1962-64 period in
Pacific there were six sales totaling 339.8 acres that involved a local
private seller and a corporate purchaser, These sales matrices were
especially useful in verifying category changes noted in the landownership
maps. As the matrices indicate, corporate and absentee purchases slightly
exceeded corporate and absentee sales throughout the analysis period.
Corporate purchases increased in Pacific from 1971 to 1973 (25 compared with
8, 5, and 13 in the previous 3-yr periods). This increase may be related to
the existence of the power plant, but we feel that no conclusion can yet be
drawn.

CHANGES IN MEAN SIZE OF PROPERTY SALES

The sales data were used to calculate the mean size of individual sales
for each 3-yr period. Up to 1970 the mean size of individual sales decreased
similarly in both townships, indicating the similar rates of residential
development earlier documented for these periods (Figure 26). From 1971 to
1973 the increase of the mean size of sales in Fort Winnebago represents the
diminishing impact of residential subdivisions there, whereas the
corresponding reduction in mean size of sales for Pacific represents the
rising impact of the more recent subdivisions there. The mean size of sales
in Pacific dropped from more than 41 acres at the start of the analysis period
to only slightly more than 10 acres during 1971-73, a 75% reduction. Although
the mean size of sales dropped noticeably in Fort Winnebago during the

~48-


Kusler, J. 1972, Rural land use in Wisconsin: A preliminary description of
problems and preventive efforts. Institute for Environmental Studies,
Working Paper 8A, Univ. Wisconsin-Madison, Madison, Wis. 144 p.

McLaughlin, J, 1975. Oral presentation before the Land Resources Seminar
(Institute for Environmental Studies. Univ. Wisconsin-Madison, Madison,
Wis. (22 September 1975.)

McMillan, M. 1975. A power plant in your community? Univ.
Wisconsin-Extension, Bull. number G2666, Madison, Wis, 17 p.

Martin, L. 1965. The physical geography of Wisconsin. 3rd ed. Univ. of
Wisconsin Press, Madison, Wis. 608 p.

Moyer, D.D. 1974. Land title records and recording procedures in the United
States. Economic Research Services, U.S. Dep. Agriculture, Washington,
D.C. 59 p.

Rockford Map Publishing Company. 1961, Plat book, Columbia County,
Wisconsin. Rockford, Ill. 32 p.

Rockford Map Publishing Company. 1965, Tri-annual atlas and plat book,
Columbia County, Wisconsin, Rockford, Ill. 34 p.

Rockford Map Publishing Company. 1968, Tri-annual atlas and plat book,
Columbia County, Wisconsin. Rockford, Ill, 34 p.

Rockford Map Publishing Company. 1972. Tri-annual atlas and plat book,
Columbia County, Wisconsin. Rockford, Ill. 34 p.

Rockford Map Publishing Company. 1974, Atlas and plat book, Columbia County,
Wisconsin. Rockford, Ill. 36 p.

Rosner, M, 1974. Fiscal impact model: A simulation approach to analyzing
the local fiscal impact of second home development, Unpublished.

Schmied, A.A. 1968. Converting land from rural to urban uses. Resources for
the Future, Washington, D.C. 103 p.

Schmied, R.B. 1973. A case study of public information and participation in
the siting of the Columbia Generating Plant. M.S. Thesis, Univ.
Wisconsin-Madison, Madison, Wis, 152 p,.

Shaffer, R.E. 1972. Evaluating the economic impact of new industry on
Wisconsin communities. Univ. Wisconsin-Extension, Madison, Wis. 34 p.

Stauber, R.L. 1974. A technical guide for measuring the impact of tax base

changes on the property tax burden in Wisconsin, Univ.
Wisconsin-Extension, Madison, Wis. 51 p.

5T-


DISCLAIMER

This report has been reviewed by the Environmental Research
Laboratory-Duluth, U.S. Environmental Protection Agency, and approved for
publication. Approval does not signify that the contents necessarily reflect
the views and policies of the U.S. Environmental Protection Agency, nor does
mention of trade names on commercial products constitute endorsement or
recommendation for use.

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-35


TECHNICAL REPORT DATA

(Please read Instructions on the reverse before completing)

7, REPORT NO. 2.

EPA-600/3-80-021

3, RECIPIENT'S ACCESSION NO.

4, TITLE AND SUBTITLE
Local Land-use and Landownership Patterns Near a
Power Plant-Wisconsin Power Plant Impact Study

5. REPORT DATE
| January 1980 issuing date

l6. PERFORMING ORGANIZATION CODE

7, AUTHOR(S)

Michael Patrick Shaver and Philip Page

lg. PERFORMING ORGANIZATION REPORT NO.

lp. PERFORMING ORGANIZATION NAME AND ADDRESS
Institute for Environmental Studies
Environmental Monitoring and Data Acquisition Group

70. PROGRAM ELEMENT NO.
1BA820

71 CONTRACT/GRANT NO.

University of Wisconsin-Madison

Madison, Wisconsin 53706 R803971

12, SPONSORING AGENCY NAME AND ADDRESS
Environmental Research Laboratory

13, TYPE OF REPORT AND PERIOD COVERED

- Duluth, MN Final; 11-69--4/75

14, SPONSORING AGENCY CODE

Office of Research and Development
P EPA/600/03

U.S. Environmental Protection Agency
Duluth, Minnesota 55804

15. SUPPLEMENTARY NOTES,

76. ABSTRACT

As a result of the construction of the Columbia Generating Station (Columbia I)
near Portage, Wisconsin, the three sponsoring utility companies began making compen-
sation payments in 1971 to the host township, Pacific Township, Columbia County. As
specified by Wisconsin statutes, these payments are designed to compensate the town-
ship for property tax losses caused by the plant, for possible increased costs for
social services, and for possible increased environmental degradation. Despite recent
amendments to the statutes, these payments have created a "tax island" in Pacific
Township; that is, the township no longer needs to levy any local property tax.

Property records and land-use maps indicate that by 1975 residential development
had accelerated in the township, although no significant increase in commercial or
industrial development was evident. The sharp upturn in the rate of residential
growth contrasted with a continuous and moderate rate of growth in the adjacent town-
ship of Fort Winnebago. The change in Pacific Township was accompanied by decreases
in the average size of individual property holdings and in the average size of
individual property sales. No significant change was found in the proportion of
absentee or corporate owners in the township.

These findings must be considered preliminary, since they are based only on the 4
years following the beginning of construction of the station, and since other factors
may have contributed to the observed changes.

17. KEY WORDS AND DOCUMENT ANALYSIS

fa. DESCRIPTORS b.1DENTIFIERS/OPEN ENDED TeRMS |c. CosaTi Field/Group
Land acquisition Wisconsin power plant 43 A,B,F
Land titles study 70 F

Land use Columbia County,

Taxes Wisconsin

8. DISTRIBUTION STATEMENT 19. SECURITY CLASS (This Report) 21, NO. OF PAGES

Unclassified 68
1 b 20. SECURITY CLASS (This page) 22. PRICE
Release to public Unclassified

EPA Form 2220-1 (Rev. 4-77) PREVIOUS EDITION IS OBSOLETE

60 ‘© US GOVERNMENT PRINTING OFFICE 1960 ~657-146/5570


series of detailed land-use and landownership maps of both townships. This
very detailed process precluded our extending the analysis to additional
control townships or host townships.

5.


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-47


SECTION 6

DISCUSSION

This preliminary study is mainly significant in identifying the increased
residential development that occurred in conjunction with the siting of a
power plant and the creation of a tax island. This documentation of
accelerated residential development is based on only one postconstruction
sampling, encompassing just 4.5 yr, It is impossible to predict to what
extent this initial trend will persist. Pacific's total property categorized
as residential at the end of the survey period was still only 325 acres, a
small proportion of the total area. Certain indications suggest, however,
that the increased rate of residential development will probably persist or
accelerate in the near future. The property-transfer records for the township
reflect several large recent acquisitions by individuals and agencies
specializing in residential development, such as the November 1973 purchase of
155 acres by Georgetown Homes Incorporated. The landownership records
indicate that much of the property surrounding recently platted subdivisions
in Pacific is still owned by developers and is equally well suited to
residential use. In fact, the official plats depict various expansion
features incorporated in the design of these subdivisions. Some plats already
depict future additions not yet approved or incorporated in the data.

Although actual future rates of development in Pacific may be affected by
economic factors such as the housing market and interest rates, the potential
for sustained acceleration of development clearly exists in Pacific Township.
The data for Fort Winnebago do not: reveal any similar potential for
accelerated development.

The evidence of increased residential development associated with the
power plant and the resulting tax island does not establish a causal
relationship. The documentation required to establish a causal relationship
would entail expansion of temporal and spatial bounds, increased control of
variables, and application of the model to universal conditions. The efficacy
of an undertaking of this sort is highly questionable, since the existence of
a causal relationship is quite doubtful. More likely, plant construction and
the resultant influx of revenues simply establish preconditions which may lead
to the type of accelerated development noted for Pacific. Host communities
need not employ utility-tax revenues solely for property-tax relief, They may
choose to spend the funds on various social programs, which may or may not
induce different types of development. They could, for example, employ funds
to establish an industrial park, serving to attract industry and to create new
job opportunities. They could invest the funds in a scenic park or a
recreation area, designed to attract tourists and related development. As
either an alternative or a supplement to such actions, the host community
could exercise land-use controls, such as zoning, to control or restrict

-53-


Researchers conducting further studies should consider other methods in
addition to those used in this study. Tax-assessment records, which could not
be obtained for this study, should be used if possible. A price series for
land in the study area and inclusion of data on the value and type of new
residences should be considered. Additional variables that may affect
development, such as those listed in section 1, might be analyzed. To assess
the relative importance of the tax-island effect, several control areas should
be used.

-1-


EPA-600/3-80-021
January 1980

LOCAL LAND-USE AND LANDOWNERSHIP PATTERNS NEAR A POWER PLANT
Wisconsin Power Plant Impact Study

by

Michael Patrick Shaver
Philip Page
Institute for Environmental Studies
University of Wisconsin-Madison
Madison, Wisconsin 53706

Grant No. R803971

Project Officer

Gary E, Glass
Environmental Research Laboratory
Duluth, Minnesota 55804

This study was conducted in cooperation with

Wisconsin Power and Light Company,
Madison Gas and Electric Company,
Wisconsin Public Service Corporation,
Wisconsin Public Service Commission,
and Wisconsin Department of Natural Resources

ENVIRONMENTAL RESEARCH LABORATORY
OFFICE OF RESEARCH AND DEVELOPMENT
U.S. ENVIRONMENTAL PROTECTION AGENCY
DULUTH, MINNESOTA 55804



Township the rate was 6.2 acres per year, Additions to the manufacturing and
extraction category and to the commercial category during the preconstruction
period were negligible in Fort Winnebago, as in Pacific.

Gradual rates of change in the land-use patterns of Fort Winnebago
persisted from the preconstruction period into 1970-75 (Figure 11). No change
in the manufacturing and extraction category was detected. Commercial
development during the postconstruction period was limited to the addition of
two small enterprises in sections 30 and 31. In contrast to Pacific, Fort
Winnebago continued its slow steady growth of residential development. The
1975 map reflects only the final expansion of the Redbird Estates Subdivision,
plus the addition of a few scattered residential parcels. In Figure 12 the
similarity between the rates of residential development for the two townships
before 1970 is apparent. The acceleration of development in Pacific after
1970 is the most obvious feature of the graph. This acceleration contrasts
with the earlier more gradual rate of development in the test area and with
the gradual nearly uniform rate of development throughout the period in the
control area.

LANDOWNERSHIP PATTERNS

Pacific Township

The 1962 landownership map for Pacific Township (Figure 13) depicts three
major areas of corporate ownership. Most of the corporate property west of
Highway 51 was owned by the Wisconsin Power and Light Company (WPL). The
corporate property on the other side of Highway 51 comprises most of the
holdings of the Martin Marietta Sand and Gravel Company. The corporate block
located north and west of Swan Lake was owned primarily by the Columbia
Corporation, a local land-holding company.

Absentee holdings are distributed randomly throughout the township. Most
of the absentee-owned parcels were involved in frequent changes in ownership
and in the categories of ownership. Nevertheless, the total area within the
absentee category remained about the same throughout the analysis period.

The 1965 map of Pacific Township (Figure 14) shows an increase in the
category of corporate ownership, resulting primarily from the expansion of the
Martin Marietta holdings to include an additional 317 acres. The most
significant change reflected in the 1968 map of this township (Figure 15) is
the addition to the public category of a large parcel of 540 acres. Smaller
increases in the corporate ownership category resulted mainly from
acquisitions by WPL and the Lake George Development Corporation.

The 1971 map of Pacific Township (Figure 16) reflects the ownership
pattern immediately after construction of the generating station began. The
most significant changes are the expansion of the public holdings in the
northwestern sector and the additions to the corporate category in the
vicinity of the plant-construction site. The DNR added about 600 acres to its
public holdings, and WPL acquired an additional 450 acres. In the
northeastern corner of the town the Columbia Corporation added nearly 100
acres to its holdings,

-28-


Township, filed with the Wisconsin Department of Revenue. The utility
revenues estimated for 1976 and later are based on the July 1975 amendments to
Chapters 76 and 79 of the Wisconsin State Statutes. These projections were
also discussed with a senior member of the Utility Tax Division, Department of
Revenue, who agreed that they are reasonable and conservative estimates.
Future tax levies were projected on the basis of an assumed annual growth rate
of 6%. The projected growth of Pacific Township's investment fund was
computed by assuming that the difference in the utility tax revenues and the
total tax levy would be invested as it has been in the past. This is, of course,
a simplification, since the township must also provide for its own operating
expenses, which are normally included in the local tax collection. Pacific
Townships's local budget has ranged from about $15,000 in 1970 to $21,000 in
1974. During the same period other revenue receipts from sources such as the
State and county highway funds, federal revenue sharing, per capita shared
revenue payments, and interest on the investment fund increased from about
$35,000 in 1970 to about $60,000 in 1974, Thus, the local operating budget is
more than adequately financed without the utility revenues. In fact, if
growth in the investment fund occurs as projected, the annual interest
payments from these investments will exceed the township's annual total tax
levy by 1980.

TABLE 2. ACTUAL AND ESTIMATED TAX REVENUES AND TOWN INVESTMENT FUND FOR
PACIFIC TOWNSHIP, COLUMBIA COUNTY, WISCONSIN--1971-1980

Utility-tax Township
revenue Tax levey Local investment fund
(including (State, county, property tax (annual interest

Year make-up) school) collection not included)

1971 $19,935 $176,176 $154,635 $50,958

1972 59,937 184 ,903 154,720 81,922

1973 388,969 201,046 25,283 320,000

1974 = 1,171,344 201,735 0 1,311,902

1975 752,248 213,0008 08 1,851,0002

1976 7450142 226 ,0002 08 2,470,0002

1977 725,000 239,0008 08 2,956,0002

1978 700 ,0008 253,000 08 3,403 ,0002

1979 675 ,0004 268 ,0002 08 3,810,0008

1980 650 ,0002 284 ,0002 08 4,176 ,0008

aEstimated projections based on current data and trends.

The intent here has not been to conduct a detailed and itemized economic
analysis, but simply to assess the likelihood of the township's persistence as
a tax island. The data overwhelmingly support such an assumption and further
suggest that the township could maintain this status ever in the face of
extraordinarily large increases in local operating expenses or sizable
reductions in other revenues,

-16-


RESEARCH REPORTING SERIES.

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-24-

Land-use map for Pacific Township, Columbia County, Wisconsin--1962.

Figure 4.


300+

200%

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Land Use (acres)
3
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a
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0. v T T v 7 —————
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Figure 12, Residential land use in Pacific and Fort Winnebago townships,
Columbia County, Wisconsin--1962-74.

-33+-


SELECTION OF A CONTROL AREA

The selection of a control area was difficult. The entire series of
resource evaluation reports prepared by the Columbia County, Wisconsin,
Planning Department (1970a-f, 1971) was reviewed to identify similar areas. A
dominant’ factor was the necessity of duplicating Pacific Township's location
adjacent to Portage. Fort Winnebago Township was identified as the only
municipality in the county which satisfied the basic criteria. The extent and
distribution of natural resources in the two townships are quite similar.
Similarities extend to soils, relief, drainage, wetland, public land,
transportation networks, population growth, agricultural systems, recreational
development, ethnic groups, and many other characteristics. Both townships
lie adjacent to Portage and have experienced some expansion pressures from
that source,

Some obvious dissimilarities must be acknowledged. Pacific is a small
township, encompassing only about 13,000 acres, whereas Fort Winnebago
includes about 20,000 acres. The difference can be compensated for by
standardizing data or by concentrating the analysis on relative proportions.
Although both townships presently have similar proportions of public propertv,
Pacific's public acreage was not purchased until 1965-68. The public areas in
both townships are wetland preserves with no recreational development.
Although the two townships include comparable areas of wetland, the proportion
in Pacific is much greater, and Pacific's proportion of agricultural land is
much smaller. This imbalance is evident in the land-use data (Table 1) and
will be further illustrated in a series of maps (section 5). Although Pacific
Township has historically been more developed than Fort Winnebago, the
difference between the two townships in the relative proportions of developed
property has not been excessive (Table 1). Furthermore, since this study is
primarily concerned with the rate of development, the initial inequality
should not distort the analysis.

In addition to these natural and recognized dissimilarities, a
potentially disruptive variable, zoning restrictions, was discovered midway
through the data collection. Columbia County passed its initial zoning
ordinance in 1961 and revised it in 1969 and 1973. Land within a township is
not subject to zoning restrictions, however, unless the township votes to
adopt the ordinance, Pacific has never approved the ordinance and therefore
remains unzoned (Deknatel and Harris 1970), but Fort Winnebago did ratifv the
ordinance and has been zoned since 1965. The absence of zoning restrictions
in an area surrounded by strictly zoned properties might induce development in
the unzoned area and thus might prejudice the results of this study. However,
three factors virtually eliminate the impact of the zoning differential on
land-use patterns in Pacific, First, the major thrust of the Columbia County
zoning ordinance has been "the protection of areas having prime agricultural
soils" (Deknatel and Harris 1970), but the soils in Pacific Township are rated
quite low in terms of agricultural productivity and therefore little or
nothing of the area would be subject on this count to the zoning restriction.
Second, although Pacific Township is exempted from the zoning ordinance, it is
subject to the county flood plain ordinance and the county subdivision
ordinance (Columbia County Statutes, Chapters 11 and 15, 1975). Compliance
with these ordinances requires developers to conduct the same types of surveys

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data for one site were considered inconclusive because of the recency of plant
construction. Only one site, the Valley Plant in Milwaukee, experienced no
growth in any of the various property classes. The occurrence of accelerated
residential development in conjunction with the siting of a power plant is
obviously important to a wide variety of local and State agencies. The
capacity of predicting this potential residential growth would therefore be
extremely useful to those agencies and to the host communities.

This research also provides an illustration of the system of disbursing
utility-tax revenues in Wisconsin, As early as 1969 Tarr noted that
they had "heard more complaints during hearings about the present utility
sharing formula than any other State program" and concluded that "the
imbalance caused by this formula should be corrected." As noted earlier,
changes in the distribution system in 1971 and 1975 attempted to rectify the
inequity of excessively large payments to local municipalities. The financial
analysis of this study suggests, however, that recent changes in the
distribution system have had little impact on the size of past or projected
payments to Pacific Township. Utility payments are supposed to provide
equitable compensation to municipalities containing non-taxable utility
property. The magnitude of the payments documented for Pacific, enabling the
town to abolish property taxes and amass an investment fund of over $4 million
in 10 yr, seems to exceed what is implied by the term "compensation," The
finding of this reseach, suggesting that the influx of utility revenues may
create preconditions for accelerated residential development, also implies
that utility payments, at least in this instance, exceed equitable
compensation. The influx of utility revenues documented by the Wisconsin
Public Service Commission for other host communities suggests that Pacific
Township is not an isolated example of large payments. The 1975 amendments to
the distribution system have not affected payments based on existing plants,
but they may be effective in reducing payments from future plants.

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-43-


SECTION 2

CONCLUSIONS AND RECOMMENDATIONS

Land-use maps and data demonstrated that residential development increased
in Pacific Township following construction of the Columbia Generating Station.
Between 1970 and 1975 the total acreage of residential property in the
township nearly doubled. The accelerated rate of development was discordant
with the historical rate of development in the township and with the nearly
constant rate of development in the control township (Fort Winnebago).
Furthermore, the base for continued increases in residential development is
evident in the planned but unsold residential parcels in new subdivisions.

The mean size of property holdings and the mean acreage of individual
property sales were similar for the two townships from 1962 and 1970, but
after 1970 both values declined significantly in Pacific Township, thus
confirming the increase in residential development.

On the other hand, by 1975 no significant increases in commercial or
industrial development were evident, nor were any significant changes in
landownership categories apparent. The only major changes were the utilities'
own acquisitions and increases in public holdings by the Wisconsin Department
of Natural Resources.

Increased residential development in Pacific Township, where a tax-island
effect was created by utility-tax payments, cannot be attributed solely to the
tax-island effect. Many other factors may have contributed to the increased
development. Although we cannot assert that the tax advantages necessarily
induced land-use changes, the rapid increase in tax revenues appears to have
established preconditions for increased residential growth,

Studies should be undertaken to delineate further the economic impacts of
utility-tax distribution on local political units. This study of Pacific and
Fort Winnebago Townships should be extended to assess possible changes in land
use and landownership over a larger period of time. Other townships in
Columbia County should be included as additional control areas. Similar
studies should be conducted in areas near other power plants where tax islands
have resulted and where tax distributions have not had as dramatic an effect
on local public budgets. Since Wisconsin's utility-tax-distribution system
was changed in 1975, studies should be made to determine the implications of
the new law. Attempts should be made to determine the amount of compensation
to which the host community is entitled and to test the efficiency with which
the disbursement system provides compensation.

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