Nearly 19 months after first announcing the decision to shutter its Ann Arbor research and development labs, Pfizer is disputing how much its property is worth - an argument that could have serious implications for city budgets, The Ann Arbor News reports.

Pfizer thinks its local research facility is only worth half as much as city assessors, and claims they overvalued its Ann Arbor property by about $119 million for the 2008 tax year. If Pfizer prevails, Ann Arbor stands to lose about $2 million in tax revenue. Just 100 people work there and they will be gone by year’s end. The site once employed some 2,100 workers.

The drugmaker filed an appeal with a state tax court to force a drop in its assessed, state-equalized and taxable value of five properties to a total of nearly $119.4 million from about $238.4 million, according to documents from the Michigan Tax Tribunal, the paper writes. The city denies Pfizer’s allegations that the values are too high and is asking the tribunal to dismiss the petitions.

Pfizer is Ann Arbor’s largest taxpayer. In total last year, Pfizer paid $14.1 million in taxes based on its property assessments, just under $4 million of which went to the city of Ann Arbor coffers. Pfizer’s assessed and taxable property value last year, in total, was $286.2 million, according to the paper.

If Pfizer is successful, such a change could greatly impact the amount of property tax the company pays to the state and local municipalities. Because the taxable value of the property by law cannot be higher than the assessed value, a nearly $119 million drop would mean Pfizer would pay about $6.3 million less in taxes a year, and the city would get roughly $2 million less annually.

“While the city has, in its budgets, anticipated Pfizer’s departure from town in relationship to their personal property, this kind of substantial tax appeal is not something we anticipated, something of this magnitude,” Ann Arbor chief financial officer Tom Crawford tells the paper. “We were surprised and disappointed.”

To give the figures context, Crawford said, about $1 million of that $2 million that could be lost annually goes into the city’s general fund. The total general fund budget is $83 million.

“As stewards of our resources, we are always looking at the value of our facilities and working with the communities where reduction is appropriate,” a Pfizer spokesman tells the News. “In this case, because the facility is no longer being used and the equipment has been redeployed to other Pfizer sites…we felt an appeal was appropriate.” He adds the tax appeal is “not part of any strategy of the marketing and sale of the site.”