Most Active Stories
Wed September 12, 2012
Plant Closings Begin to Take Toll on Local Budgets
GREENVILLE - The Greenville Electric Utility System’s budget for the new fiscal year is expected to reflect the loss of one of the local electric utilities’ biggest customers.
The good news for GEUS and its consumers, the decrease in revenue is expected to be offset by an anticipated drop in the cost of the fuel it uses to produce electricity. That’s according to General Manager David McCalla, who says factors like the loss of Newell Rubbermaid will result in a 23 percent reduction in revenue, but the company’s total operating expenses are expected to decrease by 21 percent to $48 million in the coming year.
A public hearing on the proposed budget is set for Thursday.
The loss of major manufacturers is becoming a bigger hurdle these days for local entities during budget time.
In the case of GEUS, Rubbermaid’s use of the company’s services provided them with a good percentage of revenue. For local cities, they're impacted through property tax collection when these companies fall off the tax roll.
In Commerce, the wait continues for Covidien’s eventual closing. The global healthcare products company accounts for 17 percent of the city’s tax roll, according to the ratings firm Fitch as we highlighted in this report. One year ago, the company announced they would shut down operations by September 2012. But a year later Covidien still employs over 300 people and indications are they’ll be in business until at least early 2014.
Nonetheless, situations such as these across the region are forcing officials to think differently about how to generate revenue to avoid a big financial hit should/when a big company closes. Follow our continuing local coverage of the economy throughout Northeast Texas here.