Several reasons to abandon the idea of Tax Increment Financing (TIF) of Wind Farms were presented to the Palo Alto County Board of Supervisors during their regular meeting on Tuesday, August 15.
Area resident Pete Hamilton arrended to present reasons that TIFing Wind Farms should be abandoned.
“Let me start off by saying, I am not here representing any group of people, and I want to make sure that it is clear that I am not representing, in any capacity, the Emmetsburg School Board,” Hamilton began. “Nor am I representing anyone else other than myself as a tax payer in Palo Alto County.”
“About seven months ago I had a very brief discussion with Linus regarding TIFing wind farms as a scheme, which is not met in a negative way, to raise more money for the County,” Hamilton continued. “At that time, I spoke against it and since that time I have done some research. So my only purpose here today is to give you what I think are some reasons why we should abandon the idea of TIFing a wind farm. Your ideas may be different. Your reasons may be different, but I would like to go through these very quickly.”
According to Hamilton, the County is receiving additional money from the 10 cent per gallon gas tax passed by the legislature in 2015. The gas tax revenue will be over $3,000,000 next year which all goes to road construction.
“The reason I bring this up first is that one of the things I discovered is that County Engineers, and not just this county, and County Supervisors, again not just this county have said that they were getting squeezed because county roads needed repairs and the gas tax had not increased,” Hamilton explained. “So the legislature addressed that at least to the point of raising the gas tax 10 cents per gallon and that is generating a significant amount of revenue. Hopefully, that is helping you folks take care of the roads that need repairs.”
Hamilton went on to point out that the Iowa Code is pretty clear in that it requires local governing bodies use TIF only for blighted areas, in other words to renew a blighted area and for economic development.
“If you have a wind farm that goes up and you as a county haven’t spent a dime to build anything or put the infrastructure in, it’s not a blighted area and I’m not sure that economic development is not a stretch,” Hamilton stated.
Hamilton stated that a study in 2012 by the Iowa Fiscal Project found that TIF use had driven up countywide tax levies nearly 10 percent. Along with this point TIF use is diverting $60,000,000 per year of state tax revenue from local school districts in Iowa. This leads to tax increases on other entities which will be financially harmed and the state will have to collect more taxes from business, property owners and individual income taxes to make school districts inside the TIF areas whole.
“If you TIF the proposed wind farm in northeast Palo Alto County, there are three school districts that will be adversely affected: North Union, Graettinger and Emmetsburg. This is assuming there will be wind turbines in all three districts,” Hamilton noted. “If all 170 turbines end up in the Emmetsburg district, if these are TIFed, the potential loss to the school district would be about $1.5 million per year, which will require school property taxes to increase.”
“I think it is important to note, that anything that is built in our district we can’t go out and willy nilly say we are going to take all that tax dollars. We are controlled by the state,” Hamilton pointed out. “The problem with this is if the wind turbines are taken off the tax role and we lose 60 students over the next five years spread out among the 12 grades, we are not going to re-staff for that, but our expenses are going to go up and that is the bottom line.”
Hamilton also pointed out that a former state lawmaker from St. Ansgar has stated, referring to the use of TIFs saying that it appears to be a large slush fund for county supervisors to use anyway they wish as long as it is called economic development. There is no oversight by any other entity. This also brought up the legalities of using TIF if there is no economic development or reuse of a blighted area noting that a group of taxpayers is suing Osceola County for this reason.
“You guys have a tough job the last year and a half. You’ve taken a lot of flack, a lot of heat on this,” Hamilton said. “This county is deeply divided over wind farms and will be for a long time. He’s a guy looking out at three, four or five wind turbines on someone else’s property or he’s farming around them and then he sees his other taxes go up because they are in a TIF district, which is very possible. I think that will create even more dissention in the county toward wind mills in general.”
“I’m not here to discuss the good or bad points of wind farms,” Hamilton continued. “I’m here only to point out why I think it is a bad idea to TIF wind farms.”
“When we TIFed Project Liberty to complete the bypass highway and when we TIFed PRO outside of Ayrshire to finish paving the last mile of road to the county line, those make sense to me,” Supervisor Craig Merrill said. “With the wind farms, there is no defined project and that makes me uncomfortable.”
“I do think before we do anything we need to know the impact on our schools,” Merrill stated. ” Our revenue is going to go up no matter if we TIF or not and we need to see if our revenue is high enough that we don’t need to TIF.”
“I would hope that you (Supervisors) would look at who this is going to impact,” Hamilton said.
“We are trying to look at five, ten years down the road when the company needs to come in and fix a turbine and make sure the road stays the way it should,” Supervisor Roger Faulstick noted.
“We really need to look into this thing further and how it will affect the schools and others before proceeding,” Merrill stated.
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