LINCOLN – Gov. Dave Heineman slammed the Revenue Committee on Thursday for advancing a bill to make wind energy projects eligible for state business tax incentives.
The governor called the committee’s priorities “misguided” and said Nebraska citizens bear the burden for special-interest tax breaks.
“It is very disappointing that the Legislature’s Revenue Committee has decided to provide out-of-state wind energy developers a tax break, but the Revenue Committee refuses to provide much-needed tax relief to Nebraska families, Nebraska seniors, Nebraska veterans and Nebraska small-business owners,” Heineman said.
But State Sen. Kate Sullivan of Cedar Rapids said Legislative Bill 104 would benefit average Nebraskans by creating jobs, especially in rural areas where good jobs are scarce.
“We have companies that are very nearly shovel-ready,” she said.
Sen. Galen Hadley of Kearney, the committee chairman, compared the proposal with previous laws aimed at encouraging businesses to move to and expand in Nebraska.
“We certainly don’t want to bring economic development to a halt here in Nebraska,” he said.
LB 104 would allow wind and other renewable energy projects to qualify for existing state tax incentives. Those incentives include sales tax refunds on capital-intensive projects.
The proposal is expected to lead to construction of a $300 million wind farm in northeast Nebraska. TradeWind Energy is proposing a 118-turbine wind farm in Dixon County near Allen. The company said it might abandon the project if it can’t get sales tax refunds on purchases of turbines, towers, blades and other wind farm equipment.
Hadley said many jobs will be created during the construction phase. About 10 to 16 employees would be needed for operations.
The Revenue Committee voted 5-3 Thursday to advance the bill for debate by the full Legislature.
On Wednesday, the measure had finished one vote short. Sen. Pete Pirsch of Omaha provided the needed fifth vote Thursday, after abstaining Wednesday.
He said he had hesitated out of concern that senators might try to attach their favorite tax proposals to the bill. He decided to vote for the bill after being assured that committee members, at least, would not try that.
Currently, 28 states, including Iowa, Kansas and Oklahoma, offer sales tax exemptions on wind energy equipment.
That, according to advocates of wind energy, has pushed new wind farms to other states because of the higher cost of buying equipment here.
Last month Heineman urged state lawmakers to hold off on passing new tax exemptions while they work on a study of the state tax system. He made the comments after giving up on his own tax proposals, which would have eliminated or cut state income taxes by ending selected state sales tax exemptions. The proposals had been met with widespread opposition.
Heineman released a statement Thursday that named all five senators who voted for what he called “out-of-state special interest tax breaks.” Along with Sullivan, Pirsch and Hadley, they include Sens. Paul Schumacher of Columbus and Burke Harr of Omaha.
The three no votes came from Sens. Charlie Janssen of Fremont, Beau McCoy of Omaha and Tom Hansen of North Platte.
McCoy questioned why the bill should be considered before lawmakers complete the tax study. “Where’s the same sense of urgency for the average Nebraskan?” he asked.
Hadley said Nebraska is not competitive for wind farms and needed to pass the tax incentives if it wants the jobs, taxes and economic development generated by them.
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