October 2, 2014
Oklahoma

Property rights group tells legislators Oklahoma wind farm tax credits are unsustainable

Legislators hear praise, worries on state wind tax credits | by Rick Green, Capitol Bureau Staff | The Oklahoman | Published: October 1, 2014 | newsok.com

Millions of dollars in Oklahoma tax subsidies are being given to wind power companies, and as the industry grows, this level of support is quickly becoming unsustainable, legislators were told at a public hearing Wednesday.

Using Oklahoma Tax Commission records, Rick Mosier, of the Oklahoma Property Rights Association, discussed the growth of Oklahoma zero-emission tax credits. These are awarded to wind power companies based on how much electricity they generate. More than $40 million of these credits were awarded in 2012. Beginning this year, qualifying companies can get paid 85 percent of the credit even with no tax liability.

He also discussed the ad valorem exemption, under which the state will pay a qualifying company’s property tax bill for five years.

When the exemption ends after five years, wind companies often file challenges seeking lower property taxes.

As more wind turbines are built, these two tax subsidies could more than double in the next four years, Mosier said. He also said there is a lack of regulation to ensure the large turbines are far enough from property lines to prevent ill effects to neighbors.

Tammy Huffstutler, of Calumet, said her property’s value declined after a wind turbine was built nearby.

She played audio of the whining and whooshing sounds she hears. Customers no longer want to come to her husband’s horse-shoeing business. She worries about what kind of damage a wind-turbine blade would do if it were dislodged by a tornado. The natural light in her house flickers because of the spinning blades.

“There needs to be some sort of regulation, to set them back,” Huffstutler said. “Wind turbines are getting closer to urban areas. Thought needs to be put into it. Consideration for others. We as Oklahomans, aren’t we supposed to be the hospitable state? So why are we letting this happen to our own?”

Rep. David Dank, R-Oklahoma City, called for an audit and cost-benefit analysis for all tax credits.

“One of the best investments we can make, fellow members, is to fund our state auditor more so he can go out and take a look at the money we invest in wind farms, nursing facilities, and money that we are giving to different entities in this state,” Dank said.

“We need to take a look at all these tax credits. We need to determine which ones are benefiting our constituents and which ones are giveaways.”

“I just want to know how much employees do you have, how much taxes are you paying, what are you doing for the state of Oklahoma,” he said.

Jeff Clark, executive-director of the Wind Coalition, said tax incentives have contributed greatly to the wind industry’s growth in Oklahoma, and the benefits of these subsidies outweigh the costs. Benefits include money paid to workers, landowners and local economies. He said Oklahoma is in competition with neighboring states that also offer incentives.

“We want Oklahoma to remain competitive for capital investment and job creation. We know that the way the incentives are currently structured creates anxiety for budget writers. We want to take away some of that anxiety by working with you to craft an incentive package that is desirable and takes away some of that anxiety.”

Chad Muegge, a farmer and banker in Lamont, said a wind company leases land from him for two turbines and pays $27,000 a year, money that now goes for around-the-clock care for a terminally ill family member. Others use the payments to offset crop losses due to drought, which decimated wheat crops this year in Grant County.

“We couldn’t depend on the rain, but one thing you could depend on was that wind is going to blow,” Muegge said.

“Where crop insurance stops for a lot of these farmers, wind energy made up some of that difference.”