"This plant, when it was built, actually saved Paulsboro from a standpoint of its financial structure because its a wonderful neighbor and a contributor to the tax base. Until now." said Paulsboro Mayor John Burzichelli.
That's because six years ago ExxonMobil appealed the assessment made on its lube plant located at Billiingsport Road.
The plant is the borough's largest tax payer, and the bread and butter of this community.
But for 6 years, the two have been embroiled in a tax lawsuit.
"The fine line of discussion is what's real property, in other words what you assess for property taxes, and what's personal property," Burzichelli said.
ExxonMobil says it has paid unfair tax bills, resulting from an above fair market valuation since 2002.
But Mayor John Burzichelli paints a different picture of Exxon, which turned a record profit this year of close to $12 billion in its second quarter.
"We have a situation where a very large industrial neighbor has chosen to exploit the tax code not because they had to for their survival. They chose to because they could," Burzichelli said.
That code, the New Jersey Business Retention Act, was passed in 1992, to help small and mid-ranged businesses become more competitive in the state.
But, the mayor claims it has unintentionally shifted the local tax burden from the industrial tax payer to homeowners.
"In those early years of the appeal we felt very strongly that we could defend the assessment," Burzichelli said.
However, each year ExxonMobil appealed, and last year offered the borough a settlement. It would accept compensation in the form of lower tax assessments and, in return, it would not ask for a cash refund of taxes it had overpaid.
"So it was assessed at roughly $46 million and when it all finishes and all is said and done, it will probably be less than $20 million," Burzichelli said.
What that means to Paulsboro is a huge financial hardship.
Last year, ExxonMobil paid the borough close to $1.9 million in taxes.
This year, it will be paying just under $1.3 million, or nearly $600,000 less.
Then in four years, by 2012, the company will owe only a projected $816,000 tax bill.
The mayor says big oil is taking advantage of Paulsboro, and it's having catastrophic effects on its residents. Taxes are going up while services are being cut.
"We will end up with less police officers, numbers still to be determined. We'll end up with less street highway people, the number still to be determined. And we're still looking at what else we can cut internally," Burzichelli said.
Superintendent Frank Scambia says the district has cut $450,000 from its school budget, eliminating teachers, support staff, activities and athletic programs.
"Our people are concerned that the kids don't suffer because of the loss," Scambia said.
The impact stretches farther into the community. Residents are receiving larger tax bills.
Bruce Meyers will be paying $800 more this year.
"This is the biggest jump I've seen, I couldn't believe it," Meyers said.
Although a settlement between the borough and ExxonMobil appears to have been reached and even put in motion, the mayor has yet to sign it.
Burzichelli says ExxonMobil is holding up the process.
ExxonMobil blames the Mayor for the delay.
The company also regrets any negative impact this has had on Paulsboro residents, and says it gives back to the community in various ways.
ExxonMobil sent the following statment:
For each year beginning in 2002, ExxonMobil paid what it believed to be unfair tax bills resulting from an above fair market valuation of the Paulsboro Lubes Plant. Each year ExxonMobil filed an official appeal with the New Jersey State Tax Court.
In 2007 ExxonMobil proposed a settlement option to the Borough of Paulsboro which did not include any cash refunds of the taxes which had been overpaid since 2002. To relieve the potential financial burden an immediate full refund would have on the Borough, ExxonMobil offered to accept repayment of the overpaid taxes via lower tax assessments over the next few years (beginning in 2008). A verbal settlement agreement was reached in 2008, but a formal agreement has not been signed.
It is disheartening that Paulsboro officials based annual budgets and municipal expenditures on tax payments which were disputed and potentially would have to be refunded. The Lube Plant and its 125 employees are an integral part of the Paulsboro Community and are committed to being good neighbors.
ExxonMobil regrets any negative impact on Paulsboro residents resulting from this protracted situation. "
Additionally, ExxonMobil sent Action News a list of contributions it says it makes to the Paulsboro community.
EXXONMOBIL CONTRIBUTIONS TO THE PAULSBORO COMMUNITY
The ExxonMobil Paulsboro Lubes Plant has been part of the greater Paulsboro community since it was built in 1991. During that time the Lubes Plant and its 125 employees have supported a variety of community service and outreach programs. Some recent activities include:
EXXONMOBIL SIGNATURE PROGRAMS
Earn and Learn Program - In 2008, twenty students from Paulsboro High School participated in this summer work-study program which provides paid classroom and work experience. Two days a week the students attend a hands-on "Science Seminar" geared toward environmental studies. Three days a week they work for the Paulsboro and Greenwich Township Public Works Departments mowing grass, painting curbs and fences, etc. An ExxonMobil summer work-study program for Paulsboro High students has been part of the community for years. A $60,000 grant from the ExxonMobil Foundation funded the summer 2008 program.
Mickelson Academy - In 2008, Paulsboro teachers were invited to attend this nationally acclaimed week-long residential program sponsored by ExxonMobil for elementary school science and math teachers. Last summer the sessions were held at camps in New Jersey, Texas and Louisiana. The innovative classes conducted by the National Science Teachers Association and Math Solutions are designed to provide third-through fifth grade teachers with the knowledge and skills necessary to motivate students to pursue careers in science. More than 600 teachers from across the country attended the program, all expenses paid.
ExxonMobil and its employees consistently support the United Way. In 2008, the Gloucester County United Way received $213,117 to be provided to agencies serving Paulsboro and neighboring communities. The Paulsboro Lubes plant manager also serves on the Board of Directors of the Gloucester County United Way.
The Paulsboro Lube Plant has for many years contributed an annual supply of motor oil to meet the needs of the Paulsboro and Gibbstown Police and Fire Departments.
In 2008, the Billingsport Fire Department received $3,000.
A representative from the Lube Plant serves on the Board of Directors, South Jersey Chemical Safety Association
Paulsboro Summer Events Series
Youth Baseball Teams
Bicycles for the Boys and Girls Club of Gloucester County
EMPLOYEE DIRECTED GRANTS
ExxonMobil has several matching gifts programs which enable employees and retirees to direct ExxonMobil Foundation grants to local organizations. In addition to matching employee/retiree monetary contributions, the Foundation recognizes the importance of volunteerism by rewarding volunteer hours with monetary contributions to non-profit organizations.
In 2006 and 2007 ExxonMobil employees and retirees directed approximately $150,000 to schools and non-profit organizations which serve Paulsboro residents. In addition, these organizations benefited from hundreds of hours of volunteer time provided by ExxonMobil employees and retirees.